Comment: Of Brexit Fears and Mass Hysteria
By Ben Weinberger
It would seem that every other pundit with an opinion on something has chimed in on this one and, on one Facebook group I participate in (for London-based startups), there is so much FUD (Fear, Uncertainty, and Doubt) being thrown about that I felt the need to jump in and, for lack of better words, put people in their place. The sky is not falling (at least, not yet, especially if the FTSE100 or DOW are indicators) and people have forgotten about some basic fundamentals. With regard to where I spend my time focused on professional services firms, what does all this mean? Not much, at least as regards what they are and should be doing now.
First of all, the GDPR (General Data Protection Regulation) still matters. Regardless of jurisdiction, protecting client data matters. Since the leak of the Panama Papers, firms have woken up to the need to limit who has access to client data – they are suddenly adopting the same principle of compartmentalizing data and teams as has been used for years in the defense industry. In the U.S., the FTC and now the SEC have gotten into the enforcement act and are pursuing companies for failures to protect data.
When it comes to law firms, even their lawyers are recommending they lockdown data. It makes perfect sense – firms will be hacked, data will be breached. By limiting who has access to which client data, firms can instantly limit their exposure. If anything, firms that fail to apply the industry-standard duty of care to protect their clients’ data are placing themselves at much greater risk and are asking for trouble. Yes, it may require lawyers to change how they work, but software has come a long way and systems exist that make it far more simple for firms to implement such a lockdown. The cost of buying the right software to limit access to only those who need it pales in comparison to the cost of not protecting that data and opening the firm up to massive liability – liability that may not be covered by professional liability insurers when they learn that the firm failed to act when that software is so readily available. Scare-tactics? Hardly – think about what would happen if your house was burgled and the insurer found-out you hadn’t locked the door or engaged the burglar alarm.
So, that’s security – what else should firms be doing? If they expect to stay in business, perhaps they should be focused on delivering the best client service they can. In today’s terms, that means a lot more than taking clients to an occasional meal or sporting event or sending the obligatory holiday cards. The world has changed and professional services – especially legal – is no longer a sellers’ market. Buyers, e.g. corporate counsel, are calling the shots. They are not only looking for the right price for the right level of service, but they also need predictability in their legal spend.
To deliver predictability to their clients, partners – the gatekeepers of work inside firms – need to monitor work as it happens – not just once a month in the form of a pre-bill. It’s essential, just as in other industries, to avoid ‘scope creep’ and ensure work stays within what was agreed. Firms that rely on pre-bills and month-end or ad hoc reports from their finance teams as their sole means of ensuring that work is on track will often find themselves behind the proverbial 8-ball; waiting even just two weeks – let alone a full month – to find-out that an associate went well out-of-scope and billed beyond what was agreed will get a firm into hot water. Either they’ll be writing-down time, writing-off time completely, or just simply being fired by the client. This is why matter management exists, and this is where technology is key. Partners need to manage their matters – and that means keeping an eye on work as it happens, avoiding the problems of that month-end ‘pre-bill surprise.’
How do firms ensure that work stays within agreed scope? Monitoring. Some firms already know this and have tried to use systems – often custom-coded dashboards – or perhaps ones designed for other purposes that require convoluted or significant process changes to be useful. No one likes change and if a system requires significant-enough change to deliver any value, it’s going to fail. Case in point – I met with a partner of a top tier firm just a couple weeks ago who talked about how her firm’s implementation of a certain technology was a huge failure amongst its partners; the software required the partners to step through a process of creating a budget for every matter just to be able to monitor that matter. I’m not saying that building budgets is bad – it’s great and it’s the right way to go, if the partners buy-into it. However, it certainly won’t be the first thing they’re willing to do and it’s not the best way to start a project – at least, not if you expect that project to succeed. The better method is start with a system that enables partners to monitor their matters without having to go through the extra step of creating a budget for every matter. Rather, if they start with simple monitoring – i.e. keeping an eye on how work is progressing through intuitive and engaging dashboards – it is far more likely to be used – and be useful.
So, if dashboards are the way to go, why spend money on an enterprise-class platform? Why not just build dashboards internally and save the cost? Because it’s just not that easy. I, for one, was never a fan of building custom solutions inside firms and don’t believe there is any competitive advantage to doing so when perfectly good (and, in all likelihood, far better) solutions already exist on the market. There have been too many high profile failures of internal development projects, or stories of firms swapping-out internally developed systems later for commercial products. Often, even more costly and painful is the advent of using consultants to build custom dashboards; again, why bother to reinvent the wheel? Sure, each firm has its nuances, especially with regard to culture, but, not so much that it warrants custom-built solutions – even if delivered on top of some industry standard back-end such as Microsoft SSRS (SQL Server Reporting Services) – the end result will always be an expensive solution to maintain and one that is limited in capability. Rather, just start with a proven solution – one that can be implemented and deliver value fairly quickly, and start seeing the benefit.
That, of course, begs the question – how quickly? As the legacy PMS / finance systems providers focus on their 12-month (or, more typically, 24-month) implementation timelines (which, assumes, of course, zero customization and minimal end-user facing screens – i.e. it’s primarily a back-office accounting package), newer, more modern systems exist that can deliver value far more quickly. A good system can be up and running in just a couple months (for purposes of monitoring matters – expect longer if your firm is ready to take it up a notch and move into the more complex uses of such systems, such as budgeting, or even LPM) as those involve more input from the business itself. However, rolling-out a quality dashboard / BI platform that delivers exactly what’s needed to get instantaneous information about matters (without going through the budget creation process first).
So, where does this leave your firm? If you’re not focused on security, you not only should be, but, more honestly, you need to be. Pay attention to your CISO or CIO and make sure he or she is working in conjunction with your firm’s Head of Risk / General Counsel. If they’re not, you’re leaving yourself – and your firm – exposed to much greater liability than necessary; consider your failure to do so a career-limiting mistake. Further, if your firm is interested in staying in business and delivering the appropriate client service needed to ensure success, time to make sure you’re managing matters, starting with the basics – monitoring matters to ensure they’re being delivered on time and on budget!
Regardless of the scare-mongering and fear over what may come in the always-uncertain global economy, your firm needs you to remain focused and do the right thing.