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Law Firm Tech Evolving to Meet Changing Client Requirements

Edward R. Carroll, Chief Information Officer, Dinsmore & Shohl LLP
Edward R. Carroll, Chief Information Officer, Dinsmore & Shohl LLP

Edward R. Carroll, Chief Information Officer, Dinsmore & Shohl LLP

The new normal for law firm billing has been very well-documented over the past decade. Up until the economic downturn of 10-plus years ago, the billable hour ruled legal work. It was a simple concept rooted in a fundamental economic paradigm: Pay was determined by multiplying the hourly rate by many hours worked. When clients began feeling budgetary pressure for their outsourced legal work, a new billing standard needed to be put into place. Enter the ideas of legal project management and fixed fee arrangements. Law firms had to develop a new approach to billing clients that would create predictability of their costs. Runaway costs for matters (as perceived by clients) were no longer acceptable, and clients were looking for increased value.

Firms needed new tools to ensure a high degree of efficiency when working matters, to make those matters profitable and keep costs to clients low. Welcome to the world of technology, the legal industry. Ideas such as project management, business process (re)design, and the efficient use of technology were reasonably new to most firms. The chasm between lawyers’ practices and their hired IT personnel was closing fast. Chief information officers started being asked their opinions on business issues and allowed to solve those problems by leveraging technology. The old mission to keep email flowing, make sure there is dial tone, and don’t let “the internet go down” turned into questions about project management theories and principles and leveraging historical data to more accurately predict the effort involved in working similar matters (analytics).

In short, leveraging technology allowed firms to keep existing business, win new business, and provide a new kind of value to Clients. The Project Management Institute defines project management as “a temporary endeavor undertaken to create a unique product, service or result” (PMI, 2019). Assigning resources, developing a timeline, identifying milestones, and identifying dates translate well from traditional project management to work matters. Not quite a crowded field yet, more and more software is being developed to assist firms with this. Some early adopters are now abandoning their home-grown systems in favor of off-the-shelf products. An argument can be made that process-improvement efforts could be more beneficial to modernize how matters are worked, but for many firms, process development might be a better place to start. Many smaller firms struggle with building right, repeatable processes.

Process change (or introduction) is culturally challenging. Developing methods and implementing workflow tools to execute operations create a tangible, measurable ally to changing the culture. Workflow management systems (WMS) have been somewhat standard technology in firms. More challenging is expanding their role in new business processes and redesigning those processes to ensure efficient execution requirements are met every time. Essential to redesigning processes is the concept of harvesting the data collected in a myriad of systems used by the firm and extracting meaningful data. Remembering clients want predictability in their legal costs, being able to accurately predict what a matter might cost a client is critical to profitability and client retention. Systems developed to be able to look at similar, historical issues and build cost estimates from that information will allow firms to predict costs more accurately. Also, a growing area for vendors, analytics developers are finding an increasing desire for law firms to mine data and use it to help inform business decisions. More forward-thinking firms like Dinsmore & Shohl LLP are coupling business with technology by creating groups of lawyers and IT staff to work together to solve problems and find realistic, practical techniques to help meet client needs. With an emphasis on practicality, lawyers will find what they need from IT and continue to provide real value to their clients.

Technology is certainly not new to law firms but aggressively leveraging it is. Legal leadership has placed a historical valuing on using technology within the firm. Those most technologically mature are showing positive results. Expect other firms to benefit from the early adopters’ trials and errors and reap the full benefits of new legal technology.    

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