We love reports like the one that Clio just came out with. It’s often hard to quantify the impact of technology improvement with-in your firm, but using hard numbers can help us create a calculated road map to improve the bottom-line success of the firm.
There is a lot to digest in the report and we would encourage you to download and read it for yourselves. Since there is so much to take in we’ve taken out a few key numbers which align very closely with how, what and why technology is used in your firm. The goal here is not to make the fear-based declaration that if you’re not 100% using the perfect technology that your firm will go out of business. Instead, the intent is to illustrate that there are some commonalities between successful and unsuccessful firms – mainly using all of the tools at your disposal to differentiate your firm from others in your field.
We will start with a few pages of laying out the basis of our analysis. Don’t worry, at the end we’ll tie everything together with a technical checklist that will help revitalize one major aspect of your business – the technology.
Attracting new clients and servicing existing clients are the heavyweights into what most law firms are worrying about, and we would agree. This is the lifeblood of your business and there is nobody out there who can do this better than you. Your laser focus needs to be on being the best firm than you can be and servicing a profitable number of clients with this acumen.
Well, how do you achieve those two things? The numbers don’t lie – utilization of your time and how efficient you are with your time, unsurprisingly, are the biggest differentiators between growing firms and firms that stagnate. Work on these two things and you’ll see immediate bottom-line transformation
The more productive a lawyer is (utilization), the more successful the firm will be. The average lawyer spent 2.5 hours a day on billable work per day (31%). Growing firms consistently were able to get over that 31% hump. Obviously, this has a lot to do with the ability to attract clients, but there are a number of other factors involved which we’ll cover.
Even more interesting, the efficiency of your billable hours has a direct line relationship to the success of your firm. This means that those lawyers who were able to cram as much value into a billed hour will be more successful than a lawyer who is able to bill for less impact. This is important as it illustrates that the average consumer of legal services is educated and will shop services if they don’t think that they are getting value out of the relationship.
As we delve into how to improve a firm’s efficiency and utilization it’s our responsibility as technology advisors to recommend accretive solutions to help measurably improve the firm. There are no silver bullets in technology planning. “Proper Solutions” are terms that are often candied around as cure-alls for your firm’s particular pain points. The truth is that every firm is different, every firm has a different comfort area around technology and every firm will weigh technology’s impact differently.
The only way to start improving your efficiency and utilization through the use of technology is to roadmap how you want your firm to operate and only then planning on when and how to gradually introduce technology solutions as tools to help achieve those goals.
There is a lot to disassemble in the creation of a Technology Roadmap, which will be rather unique for each firm, so it’s first important to understand the main key concept of the Roadmapping process: The Technology Life Cycle.
A concept and reference point for developing your Technology Roadmap is understanding the Technology Life Cycle. The Technology Life Cycle describes the costs and profits of a product from technological development to market maturity to decline.
Simply put – it’s a tool that makes sure your firm is achieving ROI on your technology investments and that your technology investments reflect where you want to sit in terms of innovation. Early movers on new technology can grab a positional advantage against competition, however this is offset with increased risk this new technology brings. This is why planning and advisory are so critical at this stage. Early movers have a significant advantage. Early movers are also statistically more likely to become quickly disillusioned with their vision when rubber hits pavement
A firm cannot disrupt, a firm cannot grow and a firm cannot run efficiently if core components of its technology are not working as intended. Law journals, media, trade shows, etc are so keep on showing you what you can do, but so rarely are you being stopped to ask what you should be doing. The Clio Legal Trends report does a great job of highlighting this.
The average law firm would be best served doing nothing technical until you are able to say the following things:
Application of technology at the ingestion point is the single greatest use of technology that a law firm can make in 2019. Those adopting most technology solutions at the ingestion point represents solutions likely living at Full Maturity on the Technology Life Cycle.
The Clio Legal Trend Report 2019 cites that 68% of the sampled clients had initial inquiries via phone and another 25% via e-mail. Here is the humdinger – 64% of the consumers that responded to the survey indicated that they have had law firms simply not respond at all.
There is an enormous struggle with e-mail as 60% of the sampled law firms did not respond to the test inquiries at all, and from those who did respond, 18% did so after 24 hours, which effectively disqualifies them according to what has been discussed so far. Out of those who did respond, only 29% did so in a manner than was acceptable to the test survey.
There were 284 firms in the survey, 71% of those sampled, did not meet the criteria for a proper phone response to initial inquiries. This means that they either did not respond back in a timely manner, or came off as unlikable or confusing. Not a good combination.
No one is immune. Every industry and business sector—including the legal profession—is a target for hackers and cyber criminals. Just ask the leaders of the prominent businesses and government agencies that have been victimized in recent years.
What’s more, by the very nature of what we do, law firms accumulate highly sensitive and confidential information from clients. Law firms are increasingly being requested to allow their lawyers to work remotely (and, often, on personal, possibly unsecure devices), while at the same time being required to verify the integrity and security of their networks and information systems. Like participants in other industries, law firms also are subject to breach notification laws. And the dollars and cents do not stop there. Clients increasingly are mandating their outside counsel meet strict standards for data security.
Cyber-Security is a big discussion, but in an effort to deliver as much value here as possible some items that Fully Mature Law Firms are addressing are:
The average law firm is connected to the internet. Worse, 95% of those do not have a backup line in place. To pile on that, those that do have a backup connection do not have an automatic failover plan in place.
As of 2019 there is zero reason not to do this. There is now commodity firewall hardware that enables quick failover between connections near-instantaneously. Multiple offerings for connectivity are usually available and, when not, 5G is now nearing full-adoption and is as simple to setup as your average cable modem or DSL line.
The average law firm has approximately 3 lawyers and under 10 employees. With the typical law firm traditionally reliant upon paper it didn’t make remote access necessarily the place for law firms to push their technology lifecycle. However, times have clearly changed. The modern law firm is now overwhelmingly moving towards a paperless environment (more on that in a bit) and law firms who are chasing success – namely efficiency – now need to the ability to access their environments 24/7.
Many law firms operate without using legal case management software, especially small and single proprietorships. This hesistance largely stems from a flawed belief that the complexity of case management software is prohibitive. Firms who believe this are pointed on the laggard side of the technology lifecycle and are at a competitive disadvantage against their competitors. Efficiency – what you cannot measure you cannot improve. Proper case management software is critical to being able to do this. How does it make your firm more efficient?
The best legal case management software suites are designed to be simple enough so that both support staff and attorneys can use them effectively. The customizability built into the top programs make it easy for law firms to adapt the software to fit their specific needs. Additionally, the best case management vendors provide outstanding customer support and training to ensure that all users are adept at implementing the software.
If you are a firm who has adopted Fully Mature technology and want to push the envelope into Early Adoption please remember a few things:
Lawyers have traditionally competed by combining two key skills: legal research and reasoning. But now there’s a third tool on the toolbelt. Advanced Legal Analytics enables lawyers to gain critical advantage in the business and practice of law.
Think about it, for years the law firm has been using statistics to some degree. Focus groups have been a staple of the law industry since the law industry has been around. Now imagine taking those small sample-size focus groups into thousands of participants with the click of a button. Imagine being able to increase familiarity with opposing parties and counsel. Analyzation of judges. Creation of pitch decks.
Centralized comms are coming to the modern law firm. The two largest are Slack and Microsoft Teams and both are being adopted by organizations at an amazing page.
It’s a tool that you can use on your computer and your phone to stay in touch with your team, and keep everyone up to date with the important news and goings-on. Centralized communication programs like Slack are a great way for team who aren’t always in the same space at the same time to keep that sense of community and camaraderie. Slack is flexible, approachable, and easy to use. It works on all kinds of computers, as well as iPhones and Android phones. As we’ve detailed, e-mail continues to have challenges at most law firms. My reducing “chatter-like” communication away from e-mail and into more appropriate environments like Slack you’re going to allow yourselves to communicate more effectively.
For example, case ingestion continues to be a rough spot for many firms.