We asked a handful of vendors for their view of the highlights and challenges of 2020 from a law firm perspective, as well as where the gaps in technology were and how firms can capitalise on 2020 to effect transformation going forward.
On our vendor panel was: Peter Groucutt, Managing Director, Databarracks; Keith Lipman, CEO & Co-Founder, Prosperoware; Derek Southall, Founder & CEO, Hyperscale Group; Michael Warren, Vice President, Client Development & Intake, Wilson Allen; Greg Murphy, VP, Innovation, Wilson Allen; and Sheila Gormley, Executive VP Legal Solutions, Repstor.
What was the biggest tech highlight or achievement of 2020 from a law firm perspective? [And also, corporate counsel if you work with in-house teams?]
Peter: When we look back at 2020, we’ll say it was the year that changed how firms operated. The technology wasn’t new but 2020 forced change. A small number of firms already had progressive remote working policies and the technology to support it but in 2020 it became a necessity.
Business Continuity Practitioners have been advocating cloud computing and remote working for a long time because it significantly reduces two of your major risks – the premises and your IT.
One positive we can take from this year is that the changes firms made have benefits far beyond the pandemic and any lockdowns. They’re more flexible and more resilient.
Keith: The accomplishment of the year is the support of long-term remote working. The impact of the accomplishment leads to the highlight of the year that firms need to learn to deliver their services differently from a technological perspective. This is also better known as digital transformation. For many partners, the need to work differently was crystalized with the realization that they could deliver matters without an assistant outside their door or associates in the next office.
Microsoft Teams and Office 365 provide a new technology infrastructure that supports firm-wide digital transformation. As we end the year, many firms are working to understand how this new and rapidly evolving platform will impact their firm and facilitate remote work.
Derek: We have been working with a global corporate in completely enhancing and transforming the way they contract. Goes straight to top and bottom line. Really exciting with huge returns.
Sheila: The pace with which firms have adapted to a new norm of online meetings and online service delivery has been very impressive. . They have achieved two years’ worth of digital transformation in just 2 months through having to enable their fee earners to work remotely. The market and suppliers rose to this unprecedented challenge. Here at Repstor we are hugely proud that we’ve been able to continue to implement our solutions for Clients remotely and have seen a number of successful go lives with law firms and corporate legal clients alike.
Where were the biggest gaps in technology? How much progress have law firms made in filling the gaps? Provide examples if you can even if on a no-name basis.
Sheila: Law firms typically have a lot of legacy technology, point solutions. Making these systems accessible remotely and during the pandemic was difficult for many firms. So system consolidation became key to address this. Conversely, the speed and adoption of Cloud technology, such as Microsoft Teams highlighted gaps around the need to apply appropriate governance and control to these types of solutions. That’s where we come in!
Derek: The innovation market despite being more mature has gaps. People still seem to still be struggling in making innovation (and business transformation) happen. There is still too much focus on product rather than capability. To much emphasis on rolling out generic products than innovating. Too many small teams working on isolated products rather than sustainable innovation. A small group of firms are making real progress though.
We are increasingly working client side and are helping in house teams with tenders. There is a real step change in how some firms are presenting themselves. Their offerings are very solutions led delivered by multiskilled terms – much more like how the big 4 present themselves. The days of people simply cutting and pasting stock answers have gone.
Keith: Understanding and leveraging Microsoft Teams is the biggest gap that firms need to solve. MS Teams is not just about chat and sharing documents; it also includes task management, no-code/low code databases, lists, and lots of third party add-ins.
For firms deploying MS Teams for matters, they will need to solve some basic gaps:
• Map Teams to client-matter numbers
• Enforce ethical walls
• Manage external user access with appropriate permissions
• Ability to save important conversation threads as separate documents
• Archive the entire Teams when the matter is over
• Integrate with the DMS
• Support matter file transfer, legal hold and disposition policies.
Michael: The biggest technology gap we see is around how firms use data to make business decisions. We are operating in a world of increasing and increasingly diverse competition so now it’s more important than ever for firms to get it right. Particularly around marketing and business development, law firms have relied on hospitality and in-person interaction to build and maintain relationships. Going forward, it’s likely that firms will continue practices developed during lockdown. Therefore, they’ll need to rely more on technology to make and maintain connections. Outreach efforts and operational decisions need to be based on data derived from key points throughout the client engagement life cycle.
Having a system where they can quickly and easily find out “who knows whom” is critical. To that end, a CRM system has so much potential; but collectively, firms need to understand that maintaining contacts is only one part of it. If we’re ever to derive real value from CRM, we have to capture information about the people we know, the meetings we have, the work we do best, who our best clients are, and the most valuable information about those clients that can help us grow our business. Therefore, in 2021 analytics around client relationship management, fueled with data from multiple rich sources, will come to the forefront and be more important than ever.
How has COVID impacted law firm IT budgets and do you see that changing?
Keith: The start of the pandemic had many firms pull back their IT spending. However, we see now that many of those firms have started spending again with a focus on technological solutions to address their remote work and governance needs.
Sheila: Some firms have been cautious with their budgets given the uncertainty they are facing while others have increased them to respond to the compelling need to transition to Cloud and to consolidate systems. Some firms have diverted budget from Real Estate to IT to fund this.
Peter: Our experience has been that budgets haven’t significantly changed. At the beginning of the year, when the first lockdown was introduced, inevitably projects were put on hold as firms waited to see what the impact would be. Quite quickly, those projects started again. We might see that change next year when the knock-on effect begins to flow though the supply chain affecting more clients.
Derek: The right answer is that more should be spent on tech and KM at the expense of other areas like real estate. This is happening but sadly not as much as I would like to see as some are still reporting static or reduced budget – in fairness though we are still very much in the thick of the covid storm albeit many firms have performed better than anticipated. We are working with some firms though who are really looking to remodel how they deliver and their operating platform. Some of this is being driven by management which is great to see.
Will the elevation in the status of tech and IT teams we have seen this year stay for good? If not, why not?
Derek: IT teams have really performed – as has the software market. I would very much like to see this continue and for this role to morph into changing organisational design. This is happening for some but sadly not across the Board. Equally some innovation people have been seen as real heroes in the pandemic but for others their contribution has been seen as more questionable.
Keith: IT teams that support transformation will always be highly respected.
Peter: This should be an objective for IT teams next year, to maintain that status. It was odd that so many were surprised by a pandemic, despite it being at the top of the UK, London and community Risk Registers and in the World Economic Forum’s Global Risk Reports. That blind-spot highlighted the recency-bias we are all susceptible to. We have short memories and tend to underestimate the risks we haven’t experienced recently.
Unfortunately, some will forget that the people who kept firms productive (or more productive) were the tech teams.
IT teams proved that when they have the will and intent of a firm behind them, they can make changes and adopt new technologies in a remarkably short space of time. We’ve seen this year what IT can do when unencumbered by some of the organisational barriers usually in place. IT needs to remind the firms of just how much they can achieve when given the resource and scope to lead.
Sheila: Many firms have surprised themselves at how much they have achieved in digital transformation terms in a very short period. Once the immediate pressure is off we expect firms to draw breath, ensure that all the changes they carried out at pace, conform to their risk, governance and compliance standards before planning the next stage in their IT transformation but I also hope that we don’t regress into a world where change takes years!
What changes would you like to see legal organisations undertake in order to effect meaningful transformation?
Michael: Law firms have an unparalleled opportunity to redefine how they measure client engagement and how they use data to make strategic decisions. Artificial intelligence, machine learning, and other technologies are available to law firms to study data that was once disconnected and convert it into meaningful insights, accessible across the firm. Combining data from multiple sources can help firms identify their most promising business opportunities.
Best practice in the past was to push all client engagement data to the CRM system. But by combining data science with master data strategies, that is no longer necessary. You can build a Power BI dashboard using Excel, for example, without having to create a massive data warehouse before you can deliver a meaningful output.
Keith: Firms today need to focus on business process design. This will help drive firm-wide transformation, all while having the necessary processes in place to support such efforts.
Derek: I think there are several and have recently written a piece on it –2021 Business Planning. The 10 “Must Haves” for a Digitally Savvy Law Firm — Hyperscale Group Limited. For me the biggest three would be: 1) Sort out your MS365 strategy; 2) Fix your operating platform and the “missing middle”; 3) Focus and understand what your lawyers actually do. Start looking at actual legal tech rather than operational tech with no legal in it. The latter has had far too much focus over the last few years.
Sheila: We would like firms to recognise that this past year has shown how quickly we can effect change and how adaptable our users are to it. We also see that firms are challenging the legacy vendors to ask more questions like –“Can I achieve this with Microsoft 365”?. We hope to see these trends continue. Our other aspiration is that firms will continue in their willingness to explore the innovation/value for money offered by smaller, more agile vendors in the SME technology community.
What will or should be the hottest trend in 2021?
Sheila: For us, how Law Firms can best leverage Microsoft Teams is the hottest topic on the agenda for 2021. Almost every firm we talk to (in Legal and wider professional services) is putting Teams Governance and external collaboration into their 21 budget. Consolidation and transition to cloud first tech will continue at pace.
Greg: To counter economic fallout from the pandemic, now is when a data-backed business strategy is critical. However, many practitioners rely on antiquated data models that only factor in practice management system (PMS) data to inform strategic decisions. Performing analytics only on a limited data set can obscure full visibility of strengths, weaknesses, opportunities, and risks. This limited visibility fails to provide information related to the root cause of outcomes for clients and matters in financial performance and client satisfaction. There are newer and much better options available using data, and likely software, firms already own.
Prominent technology vendors have made tremendous leaps forward when it comes to innovating the use of analytics and information captured from intake and time entry among others, to augment the very rich data available in the firm’s PMS. This data can be combined and visualized more easily using AI and machine learning to support strategic business decisions. Doing so can be less complicated than firms may think, especially for those trained in data science.
Derek: This has to be the year of MS365 in legal (plus the suite of capability behind it like AI, Digital Dictation, Power Automate etc). We work a lot with corporates. Generally they have been quicker to embrace MS365 than law firms who have perhaps had more legacy to deal with. The capability is huge and in practice this tends to lead to a real change in outlook and a massive diminution of your tech stack. You need a clear strategy though – what products will this replace too? Firms need to have the answer.
Keith: To facilitate remote work this year, we have witnessed an unprecedented rise of 400% in daily users for Microsoft Teams. Based on that, Microsoft Teams will continue to remain the trend for 2021 too.