Have you been throwing money away investing in IT for the wrong people? Perhaps it’s time to look at the bigger picture.

This article is aimed at partners and law firm business managers – not IT staff. As such, it does not pretend to supply the answers to your IT needs and issues. Instead, it aims to challenge some of your preconceptions about legal technology, not least whether many law firms’ business development plans have been doomed from the outset because either their IT strategies were operating in a vacuum or else channelling their focus in the wrong direction.

Let’s be cynical

There is an old joke that asks what the difference is between the movie Jurassic Park and the legal technology market. The answer is that one is a hi-tech adventure playground populated by dinosaurs and the other is a movie by Steven Spielberg. Since the latter half of the 1970s, law firms in the UK have spent an estimated £3.5bn between them on computers, telecommunications and similar law office automation technologies. But what benefits have there been?

The answer, sadly, would appear to be: not a lot.

Indeed, in most firms all this investment in IT boils down to little more than buying accounts, word processing, e-mail, and client matter database systems. All of these merely replace older manual and mechanical technologies – adding machines, typewriters, telephones and filing cabinets – that have been performing the same functions since the end of the 19th century. And all are primarily ‘back office’ support systems to help cashiers, secretaries and clerical staff in their work but which apparently offer few, if any, tangible benefits to the lawyers in the ‘front office’.

Put simply, over the past 30 years lawyers have spent large amounts of money on IT systems that most of them can ill afford, for no apparent purpose or benefit.

What lawyers have always wanted are systems that will help, or even transform, the way in which they carry out their legal work or ‘lawyering’ activities. However, what they keep getting are systems that merely seem to make life easier for just about everybody in the firm but themselves.

In fact, it is arguable that many of these systems actually make life more difficult for lawyers, as they not only need to work harder to pay for them – they also need to take time off from their fee-earning work to learn how to use them. Even digital dictation, which is currently one of the hottest-selling technologies around in the legal market, still requires some training and changes in working processes for lawyers and their secretaries.

So where and why have lawyers been going wrong? Will there ever be such a thing as a ‘killer app’ (a software application that really does transform the user’s working life: classic examples include spreadsheets for accountants and desktop publishing software for the media and creative industries) for the legal profession, that would solve these problems?

Technology is pervasive

It has long been my view that technology is not some special ‘thing’ that must be handled with kid gloves, but rather a fundamental, yet at the same time pervasive, aspect of running a modern law firm. In other words, like electricity and telephones, it is one of those things you have to have in today’s solicitors’ practices, and (probably) the sooner more lawyers start treating IT as just another part of the law office wallpaper – part of the infrastructure – and stop worrying about the mystique surrounding the subject, the happier they will be.

So forget all the dot.com-era nonsense about technology opening up ‘new legal paradigms’ – IT is primarily a tool to help you create and deliver legal services in a way that is more convenient both to your firm and your clients. It can also deliver improvements in efficiency and productivity, so you can get through the same workload with fewer resources and in less time – or more work with the same resources and in the same time. Or, to put it in more stark terms, legal technology’s role in life is to help you make more money, get home earlier on an evening – yet still keep the client satisfied. Ultimately, technology should improve profitability.

I am acutely conscious that getting lawyers to use any form of technology is an uphill battle, and that without ensuring there is a genuine buy-in from prospective users, the introduction of any new technology risks generating a very poor return on investment. The shorthand I use to cover this situation is:

PCPCT – People, Culture, Process, Change, then Technology

In other words, it does not matter how good the technology you are seeking to implement may be, unless you first address the people issues, the culture of your organisation, the working processes and begin implementing the appropriate changes to them, the IT project will not be a success.

Technology is an enabler rather than a driver and if you place the emphasis upon the IT without first getting all the other elements in place, you risk wasting money on merely computerising existing inefficiencies. The IT industry acronym for this is GIGO: garbage in, garbage out.

Joined-up v semi-detached

To use the well-known Black & Decker analogy, people do not buy an electric drill for its own sake – they buy it because it will help them make holes in walls or pieces of wood as part of some larger DIY project. In the same way, despite the fact we habitually talk about computer ‘solutions’, as already mentioned, legal technology is not an end in itself but merely a set of tools to help solicitors and law firm staff achieve specific professional and commercial objectives.

Unfortunately, many law firms still fail to appreciate this and focus almost entirely upon narrow technology issues rather than how that technology might help their firm achieve its broader business objectives. Such firms have what can only be described as a semi-detached IT strategy that has been drawn up, often by technology enthusiasts, in isolation from – or at least involving very little consultation with or buy-in from – their colleagues within the rest of the firm.

For technology to work, it must be seen in its correct context as a complementary, or enabling, part of the firm’s overall practice (or business) development plan. A firm must first decide where it is going as a whole – such as which areas of legal practice its wishes to focus on and what types of clients its wants to service – and then, but only then, turn its attention towards how technology can help it achieve these objectives. In other words, technology must be part of a joined-up rather than a semi-detached strategy. (It goes without saying that technology is only one part of the business strategy mix, and that it is equally important to have inputs from other areas, including marketing, personnel/HR and financial management resources.)

It is therefore – or at least it should be – a fundamental principle of modern law firm management that before you embark upon any new project, you first devise a strategic plan that will help define not only what objectives you are hoping to achieve, but also what the likely benefits will be to the practice of pursuing theses objectives and why this particular course of action is most likely to realise these specified objectives. Then, and only then, should you start looking into the potential role of IT in helping deliver this strategy.

Unfortunately, when it comes to technology far too many law firms are guilty of throwing caution and common sense out of the window and hurling themselves into ill-conceived ventures that are at best unprofitable and at worst counterproductive. Blame ignorance or excessive enthusiasm, either way this approach can usually be traced back to a fundamental failure to devise a proper strategy.

Indeed, rather than a technology project or IT strategy being pursued in isolation from the firm’s broader business strategy, all too often it seems that the mantra ‘let’s buy a new computer system’ can actually become a substitute for developing a proper business strategy. This phenomenon was particularly in evidence during the dot.com boom of the late 1990s/early 2000s, when struggling law firms would invest in elaborate websites in the belief that this alone would open the door to huge increases in revenue. Like Estragon and Vladimir, those firms are still waiting.

Merely spending money on technology because you feel you should be doing something but you are not sure what, is not a strategy. It may sometimes be a valid short-term stop-gap, but in terms of the firm’s planned, ongoing business development it is about as useful as rearranging the deckchairs on the Titanic – and it could be counterproductive, wasting time and financial resources that might be better used in the development of a proper strategy.

It’s the clients, stupid

If you ask a lawyer what they do for a living, they will usually say something along the lines of ‘we solve our clients’ problems’, ‘we provide legal advice’, ‘we offer a professional service’ or ‘we interpret and apply the law to resolve disputes’. Unfortunately, this is the wrong answer and reflects the ‘we are members of Ye Olde Profession’ mindset that results in many lawyers still being reluctant to embrace modern business methods.

In fact, what lawyers actually spend a considerable part of the day doing – anywhere between 20% and 60% of the average working day, according to some estimates – is shuffling bits of paper about, retrieving files, making notes on files and exchanging routine correspondence, e-mails and telephone calls with clients and other members of staff. Most of the rest of their fee-earning time is spent on the production of documents – researching, cutting and pasting from earlier precedents, dictating, editing, amending and signing off documents – which will then be delivered to the client, filed (both for record-keeping purposes and as part of the firm’s institutional know-how) and billed.

In other words, ‘lawyering’ is actually part of a process which, through a series of steps – only some of which involve the use of legal skills – results in a service being delivered to the client. One of the key roles of technology, therefore, is to help deliver such services to the client – and you should note here that the most important word in this sentence is ‘client’.

Although the last 30 years have seen a growing emphasis being placed upon the distinction between ‘front office’ and ‘back office’ law office automation systems, not only have they made very little practical difference to the way lawyers actually work, but, as far as the real world is concerned, these are essentially internal, inward-looking support technologies. And, as such, for all practical purposes they are totally irrelevant to law firms’ clients and prospective clients.

Consider, in contrast, the experiences of the UK retail banking sector. One of the big success stories in recent years has been the launch and growth of First Direct, the telephone banking division of the HSBC Group.

Obviously, to have been able to start from scratch and build up a successful banking operation within the space of a few years suggests First Direct must have some very good internal IT systems. It must have a good marketing system to be able to identify and maintain contact with prospective customers, as well as the equivalent of a client database for looking after all the current account-holders’ records.

It must have good internal accounts systems for processing all the payments going in and out of customer accounts, and for ensuring that any deductions for bank charges and interest payments are accurately identified, calculated and allocated. It must have the equivalent of diary reminder/workflow management software to ensure direct debit and standing order instructions are paid in or out of customer accounts on the correct date and for the correct amount. And it must also have a smooth document production and management system – the banking equivalent of word processing – to produce and send out neatly printed statements each month.

But, frankly, who cares? I did not open an account with First Direct because it had all this backroom support technology lurking under the bonnet. The reason I switched to First Direct was because of the value-added services it could offer – which, in this case, was a 24-hours-a-day, 365-days-a-year telephone banking facility.

Of course, the accurate processing of transactions going through my account is important, as is its ability to handle my direct debits without a hitch and send me accurate statements each month, but I assumed that, as a modern bank, First Direct (in common with most other retail banks, although the same cannot be said of some of their call centres) would provide these support services as a matter of course.

Now compare this with the situation that prevails at over 99% of law firms in the UK. Almost the whole emphasis of their IT projects and expenditure is on inward-looking systems but, once again, who outside of the firm really cares?

A commercial client does not take new business to a City firm because they like the look of the fancy fonts used in the correspondence it produces using Microsoft Word 2003, or because they are impressed to learn that partners have desktop access to on-line legal information services. No, they go there because they know (or at least hope) they will receive the best possible advice and service.

In fact, as long as the service is good (among other things this means reliable, on time, at the right price and possibly also delivered in a way specified by the client, which could have IT implications) most clients – commercial or private – probably couldn’t care less if a law firm’s entire document production was in the hands of a bunch of chimpanzees sitting at manual typewriters and taking time off from recreating the complete works of Shakespeare.

The chief executives of larger law firms talk about the importance of a practice’s support facility (IT, secretarial, library, accounts, paralegals) being able to deliver a good service to their ‘customers’. By that they generally mean the partners, solicitors and other fee-earners who rely on these support services – but the only ‘customers’ who really matter are the fee-paying clients!

In the circumstances, it is hardly surprising that the legal profession has not yet managed to find a technology killer app and has had a frequently less-than-satisfactory experience with IT, because it has spent the past 30 years approaching the subject from the wrong direction. Lawyers have been throwing all their energies (and money) into inward-looking technologies when they should have been following the example of, for example, banks and insurance companies, and concentrating on outward-looking, client-facing systems.

The legal world has devoted over a quarter of a century looking for systems to make life easier for lawyers (supply-led applications) whereas it should have been concentrating on systems to meet the needs of its clients (demand-led applications). Is it surprising that so many technology strategies have failed or else been misguided?