“Crazy money” – What the Law Society’s £61m IT project would buy in private practice

Here’s a good one. Which legal IT project costs the same amount as it would cost to implement a major practice management system in every law firm from 50-150 in the top 200 firms in the UK?

Yes, of course, it’s the Law Society’s £61m latest IT venture, which, following a Deloitte IT review, has seen the body put together a roadmap to address the deficiencies in the Law Society’s and Solicitor’s Regulation Authority IT and separate out the two systems.

Little detail is yet known about the project – the Law Society was unable to respond before going to press – but here’s some detail from a meeting of the Law Society’s ruling council:

“The full implementation of the roadmaps will result in the SRA and TLS having separate IT systems, specifically designed to support the different business needs of each body, supported by separate IT teams in each body. As a result it is planned that not only will services be more secure, resilient and flexible but that IT running costs for both SRA and TLS will reduce significantly. In addition, the improved services will enable the realisation of business, customer service and cost benefits in both organizations.”

Here’s what they say about the cost:

“The total gross capital investment (i.e. before the realisation of programme benefits) over the period 2015/16 to 2019/20 is currently estimated at some £61m, with the net cost being £37m. Investment within the programme is front loaded with the investment in 2016/17 estimated to be up to £30m.”

Senior legal IT managers and IT directors have been helpfully drawing parallels with how that money compares with the IT spend within the private practice law firms that the Law Society represents.

If law firms spend an average of 4% on IT (often that figure is cited as 3%) and you are a top 100 law firm generating around £100m in revenue, then your annual IT costs would be £4m and £61m would mean a total outsourcing of all technology spend for over 15 years.

Obviously most law firms, even those in the UK top 100, earn nothing like £100m, so you can do the math.

Most law firms also calculate IT costs by headcount and one senior executive of a large legal technology organisation said: “This is an awful lot per head and totally out of kilter with what its members are spending. Is it another project that will go out of control?

“If you compare this to one of the top practice management systems such as Elite 3E or Aderant, 20 of the world’s top law firms would spend this amount on a practice management system across 3,000 users.”

The vice president of one major legal IT supplier simply said: “This is crazy money.”

[One IT director of a top 30 law firm suggested that you could buy a Trident submarine for £61m, however, further research has found that not to be true. Ed]

It is quite possible that further details of the Law Society’s and SRA’s project will show that it will enable law firms to interact with the bodies online more seamlessly – which would be welcomed by the industry. There are around 118,000 lawyers in the UK and complex outward facing projects of this nature are likely to be considerably more expensive than they would be for a single law firm. Not to mention that the two bodies will each have their own system. And that it is predicted that the IT running costs for the SRA and Law Society will reduce significantly.

However, revelations about the Law Society’s mammoth IT project follow its write off of over £7m following its shelved online conveyancing project Veyo, which was disbanded last year after the launch of free conveyancing portal Free2Convey.

The senior executive added: “If I was a Law Society member and I found out that they were spending this kind of money after Veyo, I would think it was highly insensitive.”