Practice Management

ABA TECHREPORT 2016

Joshua Poje is the Director of the ABA Legal Technology Resource Center and the ABA Law Practice Division.  He's the editor of the annual Legal Technology Survey Report, a frequent author and speaker on technology and practice management issues, and a contributor the LTRC blog Law Technology Today.

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In January 2007, Steve Jobs announced the Apple iPhone—a device that would drastically change the market for smartphones (which weren’t terribly smart at the time) and arguably help transform the way we integrate technology into our daily lives.

As part of his presentation, Jobs shared a slide that displayed four separate devices an average consumer might have used at the time: an iPod for music, a digital camera for pictures, a cell phone for communication, and a PDA for managing their calendar, email, and personal information. Four devices to purchase, learn how to use, and lug around all day. Four devices that didn’t talk to each other or integrate in any way.

In that context, the iPhone’s appeal was immediate and significant. Condense these expensive, bulky devices into a single, reasonably priced tool, make it user friendly and attractive, integrate the features in new ways, and suddenly you’ve provided consumers with a transformative product.

But what does a nearly decade old slide from an Apple product announcement have to do with practice management software?

When it comes to managing their practices, many lawyers are trapped in that pre-iPhone world. They use a patchwork of technologies to manage their matters. Emails and calendar in one application, documents in another, a third for time and billing, perhaps a fourth for handling the accounting. Sprinkle in some traditional paper files and forms for good measure. Most of these lawyers will readily admit that the process is clunky, frustrating, and wastes valuable time.

Though law is a vocation steeped in complexity, the technology needn’t be so opaque and it shouldn’t be an obstacle. For many firms, practice management software can be the “magic” solution that integrates functionality and data in a single place, both simplifying and expanding the lawyer’s toolkit.

Occasionally, specialized tools will still make sense. To return to the iPhone analogy, there’s a reason professional photographers aren’t trading in their full frame DSLRs for iPhones. But for the average practitioner in an average setting, practice management is a powerful unifying tool to explore.

Unfortunately, the data from the 2016 ABA Legal Technology Survey Report indicates that practice management adoption remains relatively low: just 46% of respondents reported having it available at their firm, level with 45% in 2015 and still below the recent high of 51% in 2011.

Interestingly, while availability of the software remained steady over the last year, the 2016 Survey indicates a potentially significant jump in the use of the software among those who have it available. In 2015, just 30% of respondents overall reported actually using practice management software. In 2016, that number leapt to 43%, driven by substantial increases among nearly all firm sizes above solo. Firms of 10-49 attorneys saw an increase from 32% all the way to 62%.

Why the dramatic shift? The first possibility isn’t very exciting: the response rate among some firm sizes fell below the threshold for statistical significance in 2016, meaning the numbers for firms of 10-49 attorneys, for example, are informative but not perfectly reliable. Likewise, a change in survey platforms for 2016 meant a redesigned questionnaire, which could also have slightly impacted results. The impact of that change will be clearer after the 2017 edition.

Another possibility, the one supported by the jump among smaller firms of 2-9 attorneys (where the results were statistically significant), is that the continuing pressure and increased competitiveness in the legal market is driving lawyers to look for efficiencies—efficiencies that include embracing the practice management software they may already have in their firm.

Finally, the ever dwindling lawyer-to-support-staff ratio may mean that lawyers are more likely to be handling tasks they previously offloaded to firm administrators. This could explain, in part, the jump in software use at larger law firms.

On another important point, in the 2015 TECHREPORT I noted that there was a shift in reported satisfaction with practice management software. In particular, from 2014 to 2015, it appeared that there was a nearly 10 point swing from respondents reporting they were “very satisfied” to just “somewhat satisfied.” I suggested this may have been a temporary dip rather than evidence of a trend. Based on the 2016 data, my theory seems to have been validated. The 2016 results are significantly closer to those from 2014, with 32% of respondents overall reporting that they were “very satisfied” versus just 25% in 2015.

Digging Deeper

The component elements of practice management software aren’t new to most lawyers. We’re talking about the essential tools for running a business: calendaring, managing contacts, billing, and so on. While adoption of practice management remains below 50%, we know that significantly larger numbers of lawyers are using these specific tools.

Managing Your Clients

Clients are the core of a successful law practice. Acquiring them, providing them with high quality service, and ultimately retaining them for current and future matters is the difference between a thriving practice and a failing practice. It isn’t surprising, then, that practice management software offers robust tools to manage a firm’s clients. In some tools, this includes the ability to essentially build out a unique profile for each client, including the key employees/contacts, billing rates unique to that client, important information about their business, and so on.

So how are lawyers managing contacts now? In the 2016 Survey, 89% of respondents reported that they had some form of contacts software available to them. A much lower percentage, just 36%, reported having more robust customer relationship management (CRM) software. While contacts software availability was fairly even across firm sizes, CRM was closely related to firm size: just 23% of solos reported having it available versus 66% of respondents at the largest firms.

One of the many reasons for a strong client database is the need to monitor conflicts. In 2016, 54% of respondents reported having conflict checking software available, again with a bias towards large firms.

What specific software did lawyers report for these various features? For contacts and CRM, the leading option was the ubiquitous Microsoft Outlook. This isn’t terribly surprising, but for those who are familiar with the functionality of a CRM like SalesForce, the idea that Outlook is a CRM is a bit laughable. As for conflicts software, no single product dominated the field like Outlook. Various practice management tools topped the list at around 10-12% each, demonstrating that when it comes to running serious conflicts checks, practice management software is still the way to go.

Managing Your Time and Money

As busy professionals, it’s essential that lawyers effectively manage their time. As professionals that largely bill by the hour, it’s also essential that lawyers capture that time.

As in 2015, calendaring software is standard, with 90% of respondents reporting that they had calendaring software available. Use remained level as well at 76%. Unsurprisingly, Outlook was the dominant choice at 76% followed by Google Calendar at 7%.

Availability of rules-based calendaring/docketing dipped in 2016 from 35% to 28%, though use among the largest firms bounced back from 51% in 2015 to 72% in 2016. The breakouts by firm size may be somewhat volatile, however, given the response rate on that question for firms above nine attorneys.

As for tracking time, the percentage of fees collected from hourly billing fell a bit from 72% to 65%, though the percentage of respondents with time and billing software at their firm remained level at 82%. One might expect that the usage rate would drop given the slightly reduced reliance on hourly billing, but in fact, time and billing use increased from 60% in 2015 to 67% in 2016. Again, as we saw with the overall practice management statistics, the availability of the technology is steady but the usage is increasing—a promising trend.

Digging a bit deeper, time and billing software availability at solo practices remains disturbing: 34% reported not having the technology available, almost level with the 36% in 2015. Solos are more likely to bill on a fixed basis than other firm sizes (25% for solos versus 17% overall), but it still seems likely that this data indicates many solos are tracking and billing their time manually, a time consuming and error prone approach.

Overall, this data on managing time, and then billing for that time, tells us that lawyers appear to recognize the need to effectively manage their time and stay on top of their calendars, but they’re more hesitant to track that time for billing purposes. While that’s certainly consistent with my anecdotal experience with many lawyers over the years, it’s a clear indication of the need for practice management software, where those two features are tightly integrated.

Managing Your Documents

The law is sometimes described as a writing profession, and as such, it isn’t surprising that document-related software makes up a big part of a lawyer’s tech repertoire. How are lawyers handling documents in 2016?

Basic document editing software (e.g. Microsoft Word) is universally available, but the more sophisticated tools are far less common. Document assembly availability remained level at 46% (versus 48% in 2015), as did document management software at 56% in both 2015 and 2016. These numbers aren’t negligible, but they do seem low given that virtually every lawyer is actively creating and managing documents. Real efficiencies are being missed by a significant portion of the profession.

As an aside, yes, WordPerfect continues to hang on. In 2016, 17% of respondents reported it was available in their practice.

If you’ve followed the conversation around practice management software at all in recent years, you may know that document-related features has been perceived as one of the categories weaknesses. Though the features are available, they were often limited and a bit clunky.

In 2016, that remains true in some cases, although developers have made major strides. More importantly, though, many products now offer meaningful integration options that allow lawyers to enjoy “best of class” functionality in both their practice management tool and their document management tool. In other words, you can enjoy a robust document management solution while also enjoying the integration benefits of having your files closely related to your matters and your clients.

Ready to Adopt Practice Management?

If you find the case for practice management compelling, your next thought is probably: how do I get started? Making a major change in your firm’s technology is never easy, but here are four tips to get started.

Review Your Current Setup

Failing to clearly understand your current setup and how it is or isn’t working for you is the easiest way to waste a pile of money on technology. The pattern is all too common: lawyer is frustrated by their tech; lawyer throws money at the first alternative with a decent review (usually anecdotal from a colleague); lawyer switches and discovers a month or two later that the new tool did nothing to solve their problems.

To avoid finding yourself in that situation, be methodical: sit down and draft a clear, concise statement of the facts, including what you’re using and how you’re using it. Be sure to include key support staff who may be using your technology as well. Once you have the statement, reflect on the pain points and pull them out as issues. Be specific. For example, “I just hate it” isn’t specific, but “I hate wasting so much time trying to dig up emails related to a specific matter” is.

Finally, set your budget. Shopping for new technology with a vague budget is an easy way to ensure you overspend.

Research Your Options

Armed with your facts and your issues, you’re ready to start identifying the possible solutions. Use what you’ve prepared as a guide. If organizing email is your top stress point, for example, then finding a solution with robust email integration features is imperative. If there are any make or break features for your firm, including budget, use those to prune back the available options. That’ll save you time and frustration.

Don’t limit yourself to reading about possible practice management tools on the vendor’s website. Ask for a demo or even a free trial. Get hands on. Ask hard questions about the issues you’ve identified in your current workflow. And check in with your peers before you make the leap. It’s likely someone in your professional network has tried the tools you’re considering. Benefit from their experience. (And as a shameless plug, consider attending ABA TECHSHOW where you can get both the hands on experience and the networking opportunity in one place.)

If all of this research feels like a waste of time, pause and consider: how much time are you wasting each month with bad software? How many times per week do you curse at your technology? The time you’ll spend using your new technology even in the first year will easily make up for the initial time investment. Do the hard work to find the right tool.

Consider Changes to Business Procedure

No tool on the market is going to perfectly match your current business procedures. Every product will have a “soft spot”—a weakness that can be jarring and create friction in your workflow. In truth, though, that weakness isn’t always an inherent flaw in the software; it can be an unusual quirk or weakness in your own business practices.

As part of your software transition, seriously weigh whether existing business practices add enough value to your practice to justify building your software around them. Perhaps some practices are essential, the secret sauce that makes your firm successful. But in many cases this is just about comfort zone. We stick with the processes we’re comfortable with, even if they aren’t the most efficient processes. In those cases, be willing to push out of your comfort zone. You may find that the software feature you previously found frustrating suddenly becomes a strength.

Plan for Training

When we make major changes to our software, we tend to focus on the most practical elements of implementation: purchasing the software, getting it installed, getting our data in. We often neglect what might be the most important step: truly learning how to use the tool.

Build training into your implementation plan. Dedicate time to it. Include everyone in the firm who will interact with the new software. And most importantly, have a plan to continue that training into the future. This is particularly important in the cloud era, where our tools are constantly evolving and improving.

There are many effective training methods, from utilizing tutorials and videos offered by the vendor to attending dedicated user conferences. It can sometimes be helpful, in firms with enough users, to appoint a product “champion” whose role is to learn the product inside and out and become a constant advocate for its effective use. If you’re worried about the time involved in training a full staff, the champion approach can let you focus the intense training time on a single person, who can then pull out the essential components specific to your practice and educate the rest of the staff on just those components.

Conclusion

This is the third year that I’ve explored practice management data for ABA TECHREPORT, and the mantra from my first article remains true today: practice management can reduce headaches and frustrations for lawyers across firm sizes and practice areas, and it can simply help you be a better lawyer.

In the 2016 Survey, we see a meaningful bump in the number of lawyers actually using practice management software. But with an overall adoption rate below 50%, there’s tremendous opportunity for expansion. If your firm remains on the fence, consider making 2017 the year you jump.

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