by Dan Shooter-Smith, senior legal consultant at software quality consultancy SQS
Many long-standing companies have legacy IT systems that are a bottleneck for change. The legal sector, arguably, has more challenges than most, owing to the nature of its business. A traditional model of fee earners has fostered ‘silos’ of case management and other IT systems, while pressures from the market following the recession have seen new regulations and nimble new IT savvy competitors spring up with low cost cloud systems and virtual offices. These new breeds of IT savvy legal firms pose a real threat as they are not burdened by unwieldy legacy systems. Having implemented the latest technology from the outset, they are driving an accelerated pace of IT change and are more likely to meet their customers’ demands.
Competition from start-ups pushes legacy modernisation
Smaller firms and tech driven start-ups can avoid many of the issues with legacy systems by adopting cloud technology that enables them to respond to market and customer demands by offering clients new business models with fixed fees. Many of this new breed of legal firms are effectively IT companies that also sell legal services. But larger firms don’t have the option of such a ‘green field’ approach as their clunky and inflexible legacy systems are preventing them from reacting quickly to the fast paced market.
Until now, there has been little incentive to disrupt the traditional partnership model where IT has not been considered as a priority. The legacy issues for legal firms are not just a matter of old software systems running on old hardware platforms. In-house IT has often become an ageing hodgepodge of mismatched systems, which still work fairly well for the business internally, but is unable to adapt to external changes swiftly enough. As a result, firms are in danger to lose customers and market share to the IT savvy competitors.
Another critical problem is that the business processes the systems support are often poorly documented, and the capabilities of the systems have been lost over time. Functionality may have been added and forgotten as people have joined and left the organisation, causing potentially a huge barrier when trying to establish a clear picture of exactly what is available. External interfaces may also suffer from lack of documentation.
The case for modernisation
A large legal firm is very much at the enterprise level in terms of legacy challenge. A major international law firm, with offices in many countries, may be sending and receiving a million emails daily, creating upwards of 10,000 documents, and transmitting many terabytes of data around its network, all while managing several hundred applications and storing a large amount of data safely.
If changes are made to any part of the IT systems or processes, the impact may not be fully understood. Through organic growth as well as mergers and acquisition, where new tools and systems have often been introduced, legal firms often lose visibility of the complex infrastructure. Regulatory compliance around e.g. capital adequacy (liquidity), governance and reporting (Solvency II), has also been a change driver that has resulted in increasing complexity in existing systems. One of the main issues is that major players have not stepped back to look at a strategic direction for their IT. Having concentrated on making tactical, short term technology driven changes rather than adopting a long term vision, legal firms are creating problems today and in the future.
This is particularly apparent with workflow, one of the key processes for legal firms, which operates with databases and middleware tiers. Rather than being active workflow processes, legacy systems, such as case management tools, are often databases with macros. Transforming to a new workflow tool can have a significant bearing on the business. Without genuine workflow, there is no control – changes made today may negatively impact any updates or new processes introduced in the future. Interfaces to other systems may also fail because the system allowed ‘bad’ data to be entered. Instead, with a controlled workflow tool, there is a repeatable process with clear steps to work through. This ensures system integrity and should be supported with clear documentation.
Law firms use a variety of workflow approaches for their case management, from packaged offerings, to using a generic workflow tool or even custom-built solutions. To ensure efficient workflows, case management tools are to be adopted. However, as every law firm operates differently, case management products have never been an ideal market for off-the-shelf solutions. Therefore, generic tools are often customised to fit processes – and this is the way law firms should be heading to improve efficiency.
Positively, instead of having various case management tool silos that deal with different aspects of the business, many legal firms are moving to integrated workflow platforms that can be operated by all teams at the same time. Certainly, this will reduce cost as employing support teams with the right expertise across multiple systems often prove costly.
Whatever the approach to legacy modernisation, legal firms should consider hiring the right skills from the outset, if not available in-house then outsource resources can ensure successful transition of legacy systems. With a number of challenges, to overcome the transformation has never been easy. After all, case management systems need to be integrated with billing and accounting functions, among others, as well as ensuring that they can be interfaced externally to public bodies where needed. Furthermore, a wide spread of systems and integration activity, such as introducing mobile apps, information portals and new processes like better support for risk management, are not side-lined.
Quality is at the heart of future
The key to success in legacy modernisation is software quality and testing – and making IT a priority to capitalise on the exciting developments in cloud, mobile and big data. Quality frameworks are appearing more regularly in legal firms. Discussions about quality need to be pushed up within an organisation to secure buy-in and investment. Therefore, legal firms cannot consider IT as the poor relation as technology will help them to react to business needs and market demands quicker and more effectively.
For development specifically, while some organisations are turning to agile development models that by their nature involve early testing, legal firms tend to favour the more traditional waterfall or V-model methods, where testing is introduced later and can be even more critical.
Agile tools are being used in certain transformation projects, though, to ‘shift left’ elements of testing and quality. We advocate moving to a ‘shift left’ approach as it’s essential to conduct an in-depth business analysis on what’s required for modernisation, the development and roll-out. The key ingredients to successful legacy modernisation projects around complex systems are to plan changes in a phased manner.
Although IT in legal firms is mostly delivering to internal business departments, dissatisfied stakeholders are becoming more vocal about the risk and cost of IT failures. As a result, legal firms have become more receptive to testing of applications and systems. Firms are also recruiting more from sectors that are experienced to deal with the pace of IT change, such as retail, where technology teams are used to driving up quality. An important point in successful legacy modernisation is that third-party software developers and in-house teams should not be ‘marking their own homework’. An independent internal quality assurance team, an unbiased third party or both are best suited to this task.
Planning and a clear strategy are essential to achieve success. The complex system should be broken down into phases whereby quality criteria and checkpoints are determined beforehand. Testing throughout the project will ensure successful legacy system modernisation. Some key factors include:
· Requirements must be testable and unambiguous – requirements analysis is an important process and introduces testing earlier in projects
· Systems need to be stable enough to be amenable to testing
· The risk of changes affecting live environments should be assessed – understanding and creating a ‘live like’ environment before testing is important
· Automated testing is becoming more widespread now – at SQS we have introducing automated regression testing that substantially reduces testing time and cost
Finally, selecting the right team for modernisation projects is crucial. According to our recent survey, the majority of legal firms favoured outsourcing to multiple suppliers, each selected on their experience and expertise in a specific area and their ability to meet the new IT delivery characteristics. The respondents felt that sourcing the right skills for different tasks as well as testing early enables quality to be built into transformation projects early. In summary, in the legal sector, as in other markets, it’s about outsourcing outcomes, not activities.
PLUS check out this research data: Pie charts legal