Volume 20, Number 6
September 2003


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PRACTICE MANAGEMENT

SEVEN LEGAL TECHNOLOGY PREDICTIONS FOR 2003

By Dennis M. Kennedy

Dennis M. Kennedy practices intellectual property and information technology law in St. Louis, Missouri.


For many firms, technology spending has grown to be a significant portion of the annual budget. Unfortunately, in altogether too many firms, management does not have a clear understanding of what technology dollars are buying and whether those dollars are being well spent. Here are highlights of the major technology themes and trends for lawyers and firms to expect in 2003.

Hardware buying time is here again. Many firms made their last significant equipment purchases in 1999, when businesses of all types replaced old hardware in anticipation of Y2K problems. Now, in turn, those 1999 machines are old, with a fraction of the power and capacity of even the lowest-priced computers available today. That aging hardware hinders lawyers' ability to work effectively and can even contribute to retention and recruiting problems.

Consequently, 2003 should bring a new round of hardware buying.
Equipment upgrades will also be driven by what lawyers now use at home. Many lawyers complain about the decrease in power and features when they move from their home to their office systems. We can expect this phenomenon to lead to dissatisfaction and demands for upgrades in the workplace.

Another consideration is the increased mobility needs of today's lawyer. Shouldn't all lawyers have a notebook computer, probably with a docking station, perhaps even as their primary office computer? Certainly this is true for litigators. Most lawyers can also make a case for PDAs, wireless devices, wireless access, or other specific items.

Old software has to be replaced. A surprising number of firms are using software that is five or more years old. Clearly, that raises questions about program compatibility and vendor support. Older versions of some programs also raise significant security concerns.
And what about the user's productivity? Newer software tends to have many improvements, better usability, and important features unavailable in older packages.

As will be the case with hardware, office software upgrades will be driven by what lawyers now use at home. Any recent purchaser of a computer will have the newest versions of standard software. Lawyers are increasingly frustrated when their office software lacks features of the programs they use at home.

In addition, practitioners are increasingly aware of highly useful and valuable programs for presentations, calendaring, litigation management, and other specialized software for lawyers.

Firms will need to audit their existing software, ongoing license costs, and actual usage of specific programs, and then look into new packages. Gaining control and streamlining choices will be essential. At the same time, firms will need to learn what current products can improve lawyer productivity and what their clients and competitors are using.

ROI matters. As technology accounts for a bigger slice of the budget, the dollars spent and choices made must be subjected to solid business analysis and decision making. The idea of return on investment (ROI) has been a huge issue for non-legal businesses for several years. Law firms, in general, have not taken a similar approach.

To measure ROI, a firm needs to develop standards and methods to quantify and analyze results. There are resources to help in measurement and analysis. An audit of current projects and review by an expert would likely save most firms thousands of dollars just by eliminating redundancies, unused software, and dead-end or unnecessary projects.

In 2003, firms will take a variety of approaches to ROI. Most firms need at least the following: a high-level technology audit of existing systems and projects, corresponding education of decision makers, and a full analysis of current projects and proposed initiatives, with careful attention to cost.

Failing to plan is planning to fail. One key sign of a firm committed to technology is the presence of a strategic planning group that integrates technology decisions with the firm's business plan and goals. In many firms, a complete restructuring of existing technology committees will be in order. Your committee may need an expanded profile, more decision-making powers, a more streamlined process, or new energy and fresh ideas.

Planning will become much easier with ROI standards in place. At the same time, client needs and requests will definitely force firms to consider new initiatives. Strategic technology planning will need to become a larger part of firms' strategic business plans.

We can also expect to see more of a "portfolio" approach to technology planning. In this approach, a firm takes a diversified strategy of creating a reasonable mix of low-risk, low-return and high-risk, high-return technology investments, much in the same way that one diversifies financial investments. This approach balances the risk and return of a firm's entire technology "portfolio."

As a result, 2003 will be a year in which a wide variety of old and new technologies will be tested.

The focus shifts to lawyers first. Use of technology in law firms, has, essentially, developed in three stages. First, secretaries and staff got the best equipment and software, and the lawyers were almost an afterthought. Next, technology became almost exclusively the domain of IS departments, which determined what was appropriate for the lawyers and most stable for networks. In those two stages, practitioners with specific needs were often neglected because they did not fit the firm's technology template. This year heralds the third stage of law firm technology: the lawyer-focused stage.

Word XP, for example, is designed with features that would benefit lawyers more than secretaries. Other tools that could improve the productivity of lawyers more than staff include PDAs, laptops, scanners, wireless devices, and the like.

This lawyers-first stage requires that firms educate lawyers about the tools that are available to them, as well as thoroughly research and make choices that are appropriate for individual practitioners.

Neglect the web at your risk. Law firms that don't "get" the need to manage and control their web presence will pay the price. Clients that regularly use web and e-commerce strategies as a part of business will oblige their law firms to understand and adopt similar strategies—or the clients will go elsewhere.

In 2002, there were a large number of substantial redesigns of law firm sites. This year will witness another significant round of site upgrades, as well as increased use of extents and client-centered, or personalized, approaches to websites.

Clients speak up. The unrelenting theme throughout the year will be client-driven technologies. Most of the firms with really interesting technology initiatives have undertaken such efforts at the request of clients, or as a result of assessing a client need that could be filled.

Consider how clients' desire for document compatibility forced the sea change of law firms moving from WordPerfect to Word. Clients also largely drove the early use of e-mail at many firms. Today's clients also are doing new things with technology. They see the benefits, especially cost savings, and want to bring those benefits into play to manage increasing legal costs (which in no small part result from the failure to use productive technologies). In particular, companies that are considering going to flat fees for legal services are expecting greater technological efficiencies in their law firms.

In 2003, firms should expect increasing client pressure to adopt new, compatible, and more capable technologies.

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