This is a guest article by Rupert White of the Law Society's Gazette…
Arlene Adams, new chief of the legal arm of Iris Software, spoke to Rupert White of the Law Society's Gazette about the company's plans for the future. The market is ripe for a company such as Iris, she says, and she wants to put the uncertainty that surrounded the buyouts of the CS Group era behind the new firm and move on with plans that could boost the fortunes of thousands of law firms.
Iris Software Group is the new name of the company that includes Computer Software Group (CS Group). CS Group is the company that bought legal IT companies AIM, Mountain, Videss and Laserform in 2006 & 2007. Iris now has 4,000 law firm clients in the UK, making it the biggest single player in the game. How it will keep them, and what it does next, is therefore near the top of quite a few managing partners' agendas.
Iris's rise to power has not come smoothly – customers and rivals alike have voiced fears about whether CS Group was a serious supplier or just a vehicle to be sold. Having merged with CS Group for £500 million, Iris now has to come up with a strategy that will turn different but fundamentally similar products into a coherent division offering discrete products.
Arlene Adams, managing director of Iris's legal and compliance solutions division, recently talked exclusively to the Gazette about Iris’s plans for the future. Once upon a time, Ms Adams was employed at IBM. Later she became UK sales director for one of the best-known IT companies in the world – Sun Microsystems. Before she landed at CS Group, she was chief executive of an online payments company.
This background has given her a different perspective on the legal IT market in the UK, one that other general IT people might recognise: that the business of legal IT is immature. “One of the things that struck me when I came into this market is that it's grown up out of family or lifestyle businesses, and it's not necessarily got the same practices and methodologies that you'd see in place in industrial-strength software companies.”
Law firms, in the round, are behind other sectors in terms of their use of IT, she agrees. It seems counter-intuitive, but this can be an advantage for both law firms and Iris, because the IT directions for law firms are laid for them to a great extent. “What we need to do as a company is take the best ideas of how technologies work in other markets and then apply that in the legal market,” explains Ms Adams. How well customer relationship management has worked for other business sectors and how well it works for many law firms using it is a good example, she says.
With her background at Sun and IBM, she thinks Iris can bring the world of mature corporate IT solutions to this nascent market. She also agrees that law firms, on the whole, are behind other sectors in terms of their use of IT. It seems counter-intuitive, but this can be an advantage for both law firms and Iris, because, to a great extent, the IT directions for law firms are already laid out for them.
Iris ended up in legal IT through a somewhat unconventional approach. CS Group's buying-up of several UK legal IT suppliers, after, it is widely believed, asking quite a number if they would bite, prompted plenty of whispers that the firm was just grabbing legal users to make a future sale. Then the sale came – a private equity group put up the £500 million to pull CS Group into Iris. Now Iris, and Ms Adams, needs to convince its customers and the market that it can deliver.
She accepted that there seems to be uncertainty out there, but, she says, “in the past few months we've really settled everything down, and we've got a very clear plan to where we're going.
“When I take customers through what we're doing and why we're doing it, they're really pleased, saying that for the first time there's an industry-leading player putting in significant investment that will not only deliver what they need, but more importantly give them a more secure long-term future, based on industry standards,” she says. “That's not something that customers have seen in this market to date.”
Because legal IT now forms 30% of the Iris business, she added, the venture into legal has to succeed – so Iris is investing heavily in the division, which Ms Adams says should reassure customers. “We're not thinking of this as a short-term business – what we're trying to do here is build long-term sustainable value for all the stakeholders.”
And, she says, because of the value of the Iris brand outside legal, and the fact that it was already a successful, large company before buying CS Group, the company is well pitched to deliver. “A number-one assumption in any plan has to be protect customer investment,” she says. “Customers invest for a period of time, and if we axe products without appropriate warning for customers and the investment they've made, they’ll just walk to another supplier.”
STRATEGY FOR EVERYONE
Iris's solution is possibly the only one that can bridge this seeming divide. In the short to medium term Iris is, Ms Adams says, going to develop a broker technology that will talk to any of the practice management system (PMS) products and allow them to link to Iris-developed front office applications such as document management, customer relationship management or payroll/accounts. This means Iris can develop one of these for all the PMSs it owns, making the strategy viable. These products, says Ms Adams, are “what all our research tells us that customers are looking for”.
This approach paves the way for what commentators were saying was inevitable – the ultimate move from the PMSs it already owns to a future product. For now, everything is still in the planning stage. “It takes time, you can’t do these things overnight,” she says. “You've got to be realistic about it.”
But over a longer period of time, she says, they want to build a backend system that “takes all of our experience and everything we know about the backend products” but she's keen to stress this needs to be done “in a way that enables a really smooth migration plan for customers with an existing backend, whether it be AIM, Videss or Mountain”.
Ms Adams, understandably, is extremely reserved about suggesting that customers will be forced to move up to this future practice management system. It would, she seemed to say, be several years before a complete new solution is available. There is still no announced plan for what might be in this future unified backend. But when Iris Legal announces its strategic plans at the beginning of December, this could change.
A more immediate customer concern, according to blog postings and various gripes heard over drinks, is that Iris seems to be saying it will keep several distinct products going over a long time, which cannot make good business sense, and therefore cannot be true. This seems to be misunderstanding the statements of Ms Adams, and the former CEO of CS Group Vin Murria, that no products would be end-of-lifed.
The facts are that no products will be killed, but the individual products of AIM, Videss and Mountain will eventually be so far overtaken by other products on the market and by whatever solution Iris builds to replace them that customers will be foolish not to migrate. By that time Iris will have enabled them to the extent that migration should be undaunting. The broker, or middleware, solution proposed should allow Iris to stay true to its commitment to its stable of similar products while customers are gradually persuaded that the new solution is one they want to have.
There are two problems with this approach. First, it can create its own almost circular problems – Iris has those 4,000 or so law firm customers that it needs to maintain while generating new business, but any new business made before a new PMS is created just puts more customers into areas from which they one day need to be moved.
Second, the strategy will therefore inevitably be reactive – Ms Adams has had to create a strategy and needs to bring forth a future plan for the division based on this split-level problem. And this can create more problems. The sooner Iris creates a whole new product line, front- to back-office, the sooner it can move new customers onto it, giving live test cases for existing customers to look to and building the future customer base. But if it does this too soon, CS Group customers may feel they have been railroaded.
It is not even clear yet whether any of the existing PMSs will form the basis for the future one. “If we see customers driving us down a particular route that leverages the strength of one particular product set, then I have no issue with that,” says Ms Adams. “What I'm not prepared to do is come out with rash statements of strategies.”
ROOM TO MOVE FORWARD
But there are solid advantages to this more big-picture approach. Ms Adams now has room to look at what else customers want, rather than just being a large PMS provider. Instead of spending money forward-developing individual PMSs, Iris can develop or buy in “what customers are asking for”, says Ms Adams, such as mobile working, document management, customer relationship management and payroll. The lack of good integrated payroll and HR offerings for law firms surprised Iris, says Ms Adams. Also, Iris has skills and experience in industry-strength HR and payroll systems, she says, to deliver on a long-term, industry-standard solution set.
This industry-standard solution will be Microsoft .NET. The fact that CS Group bought Microsoft .NET solution providers has been a boon, because Iris developers know the Microsoft environment well, and because acquired solutions can be developed towards a common goal, says Ms Adams. “I think it helps both in a market perspective and in an internal skill perspective.”
Also, she says, a lot of Iris's own products are based on a .NET architecture. “There's a remarkable similarity the accounting and the legal products.” This a key point in the strategy, she stresses, both because skills and knowledge can be brought into the legal division but also because “the market has made it very clear to us that they want to know that solutions going forward are built on industry-based open standards. The commercial reality,” she says, “is that the market has moved to .NET.
“What I'm committed to is two things: giving customers a technical migration roadmap which gets them there [to a future set of products] without too much pain, at a time they choose – I don’t want to hold a gun to anyone's head,” she says.
“Second, it'’s one thing to give people a technical plan, but the other thing that I'm working on is a commercial plan so that no customer is being penalised in terms of when they've made the investment and when they would then have to make a move. I want customers to feel very much in control of that.
“Most important is the challenge I’ve given to our commercial team: that the work we do has to be so good that we shouldn’t be asking customers to move – they should want to get there because of the new features, functionality and innovation we're giving them.”
Convincing firms of this is linked to how Ms Adams understands technology will help law firms survive and thrive – law firms will need technology like this. “Although the legal market likes to think it's different, it's no different from other markets,” she says. “At the end of the day it is a commercially operated and driven market. So as soon as you get lawyers who are willing to move the goalposts, the others will either be left behind and disappear, or they'll be forced to do the same.”
And customers will also provide direction, says Ms Adams. “We should thinking way ahead in terms of how we innovate in this market. We have 90% of the barrister market, and we've got a good share of the solicitors' market. The relationship between barristers and solicitors is very important, and they interact in many ways, from working together to diary appointments to fee-earning and how they pass money to each other, and the opportunity to make much more of that process electronic is significant.”
“If we can, through the adoption of technology, make that relationship much easier then that makes so much sense” One area Iris is working on, she says, is in matching barristers' diaries to solicitors’ case management. “If these diaries were available online, that you could just search, how much time would you save? Then, once the barrister has performed their duty, then why don't we just electronically bill them?”
This is, in its way, a sign of the future, she says. “I think we're starting to see a couple of practices change the boundaries, and as soon as they do that they can start to introduce competitive pressures to the others as a way of differentiating their business. And how the other practices respond to that will determine whether they survive or whether they fall away, because there'll always be someone who'’s prepared to do it.”
In other words, the future of law firms is technologically enabled and the challenge to Iris is to take its bought-in customer base forward to a product set that helps it fight it out from a position of advantage. Ms Adams is determined, forthright and earnest when she talks about the strategic future of the firm's legal business. With all those clients and the viability of the company riding on her division’s future, she cannot afford to slip up. From what she told us, there is a long-term plan, which is an improvement on what customers could see six months ago. Now she just has to slug it out in the marketplace.
• Rupert White is a member of the news team on the Law Society's Gazette and the magazine's IT specialist. This is an extended version of an article that first appeared in last Thursday's edition of the Gazette. For further details check out www.lawgazette.co.uk and http://tinyurl.com/2o5ojf