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The Vinasty saga continues

We're still getting a lot of reaction on the IRIS/CSG saga – mostly as comments added to previous postings, so keep watching the recent postings box on the right-hand column. This is the latest comment – and 'no' we don't know who made it either although its noticeable that the statement has not yet been released to the press…

“Well here it is the official position from IRIS to users:

The new combined group, encompassing the legal software brands of AIM
Evolution, Laserform, Videss Legal Office, Mountain Software, GB
Systems & Meridian Law provides you, our customers with an
extensive breadth and depth of choice that no others can match.
Furthermore, we are fully committed to all our existing legal product
lines and have no plans to end of life any products in the IRIS legal
software range.

What to make of it? At first glance it looks like a bit of a knee jerk
reaction to the criticism from users and the market generally that no
real statements had been forthcoming from CSG over the last year or so.

It would appear they have no plans to 'end of life' – for this month,
this year, 5 years?? Not very definitive and one which could be easily
changed with new management, strategy etc. Of course it's a bit of a
first for IRIS in that they have products competing in the same space
so with hindsight a woolly statement may come back to haunt them.

Reading between the lines this must mean that they are all competing
within the same group still and therefore leaders will emerge,
resources will not be shared equally and whilst some products may not
have an end of life statement issued they will quietly fall behind.

Another part of the statement reads:

We not only lead the way in R&D but also in service and support. No
other company in the market can claim to have over 300 people dedicated
to the legal software market.

Shouldn't this mean 300 people split between 8 competing product lines at the last count with all the politics etc associated. (I make it 300 between 6 = 50 people each …Charles Christian)

If you read up on their new owners you will see that they will expect
an exit in 3-5 years max at a handsome profit. Given what was paid
they'll have to go some to achieve this. Generally everyone realises
IRIS will be up for sale in a relatively short period all over again
either because it can't afford the massive level of debt or because its
owner requires the exit that it will have made clear to management over
the last few months – that's little comfort for users looking at their
future IT strategy.”

7 replies on “The Vinasty saga continues”

Issuing a simple statement such as “and have no plans to end of life any products in the IRIS legal software range.” really is missing the point.
Anybody can guarantee not to end of life a product. All that means is that you must continue to provide some bug fixes and some form of support.
Historically maintenance contracts were put in place to give end users the comfort of knowing that bugs would be fixed and help was available, if they needed it. That is no longer the case. These days users have a right to expect their supplier to continue to develop and enhance their products for the life of the products especially as software has a much longer shelf life these days and does need to be replaced every 5 years.
Users will demand no less than this from IRIS. They will want to know that their supplier is committed to develop and enhance their software to keep up to date with technological and regulatory changes both now and for the foreseeable future.
This statement from IRIS will provide scant comfort to their clients. In addition to agreeing not to “end of life” any of their products, clients will want to know that they will continue to develop and sell them.
Another supplier in this week’s Insider made a statement that they were not issuing an end of life for their product but that any users who did not upgrade would be expected to share the cost of support between them. An ex CEO of CSG told me that this approach was one that they favoured as that way you never had to withdraw support for anything, didn’t compromise your income and never publicly issued an “end of life”. Presumably the new management at IRIS will have to take a fairer approach.

We wrote up the events in the linked story here – and it doesn't look like it's greatly moved on since then.
One point though:
“This statement from IRIS will provide scant comfort to their clients. In addition to agreeing not to “end of life” any of their products, clients will want to know that they will continue to develop and sell them.”
Why? Why would they? Apple doesn't do it for major iteration releases of its OS. Neither does MS. If you buy an ERP system, sure you want your supplier to carry on with some dev, but mainly you want support and maintenance. If you want to start doing brand new, interesting stuff, you should look into new suppliers anyway, to see who could offer you a better system to deliver what will probably be a different set of business processes.
And as far as I was aware the houses CSG bought are all built on MS anyway, meaning moving wouldn't be anywhere near as horrorshow as, for example, shifting from SAP to something else.
I think on a personal level all this bashing on about how clients will 'expect' an infinite future of development with their existing system just shows how narrow-minded legal IT buyers sometimes are. No one else in the business world thinks like that, unless they buy MS or IBM. And even those who bought IBM would have been called out on that one… Oh, and MS.

The legal IT buyer's expectations of their chosen practice management system supplier are quite different than their expectations of commodity software suppliers.
Most Partners find it barely acceptable that they are forced to upgrade word-processing or email every five years or so, but do so grudgingly simply because everyone else has upgraded and they have no choice At least the risks and costs of upgrading commodity software are relatively low. The path is usually well trodden and the market is awash with the necessary skills at affordable rates.
Implementing a new practice management system on the other hand is unquestionably the most risky and expensive IT project that any firm ever undertakes.
A six to eighteen month bet the business project that has to be implemented in 'big bang' fashion isn't something any firm would choose to undertake without a compelling reason to do so. Ask any managing partner whether they consider that the profit ambitions of private equity constitute a good enough reason for them to put their business on the line. They may be compelled to do so, but it certainly isn't going to be attractive or particularly beneficial for many who have upgraded in the past five years or so.
The idea that two PMS systems both run on Microsoft platforms has got anything to do with how difficult or easy it is to migrate between them is frankly laughable. Physically getting the data out of any system is about two or three days work on a typical project, Microsoft platform or not. Compare that with (typically) hundreds of person days of mapping and translating data, replicating/improving) set-ups, developing new procedures, billing formats, reports and management information and training the entire firm on a new product.
The cost and risks involved explain why most firms (of all sizes) run their practice management system for seven to ten years or more. When a firm finally decides to upgrade, sticking with the incumbent supplier's latest product is the simplest way to mitigate the risks and minimise the costs of the project. The small/mid-market has stagnated over many year, primarily because everyone has been content with the status quo.
Is it any wonder that there is so much anxiety and resentment in the market about the huge risks, costs and disruption that may (or may not) be forced upon cottage industry customers by their hitherto equally cottage industry suppliers?

Obviously migration is a major deal – as any fule kno. The point is that an understanding of how the system might work and what platform it's on helps planning, migration and adoption. It also generally helps in day-to-day use, because a good few of the PMSs out there look very similar because of their MS/.NET underpinnings. This can mean much easier adoption, less training, etc. I've seen all the PMSs bought by Iris in legal, and in actual use most could be made to look very similar. Frankly you could move to several other PMSs, as a user, not owned by them and barely see the difference. Moving data/IA from one completely different system to another is very, very hard, but that doesn't mean you *can't* move, and doesn't mean all migrations are equally hard. Law firms move IT systems, it happens. It's a big project, but sitting and waiting for the axe to fall while whining about why it's happening is not the way forward.
Fundamentally, law firms of a certain size range chronically underinvest in IT and have done so for ages, mainly for some pretty bad reasons, such as partners getting paid better at the end of the year. This is short-termism, and I agree that the status quo won't hold for much longer. In a sense, this shake-up is coming just at the time when many law firms need to think about trading in/making drastic changes anyway. A rough industry benchmark is around 10% investment/annual cost in IT. How many law firms are achieving that? I'm not saying they all need to, but the numbers I've seen (not including the top tier or top of mid-tier firms) say just under a quarter are achieving that, with nearly half saying they've no idea. This is just not clever business.
Who knows – maybe little will happen now for a while. One reading which we're not seeing in all this panic blogging is that Iris taking on these firms may well curtail the potential drastic changes/rolling together everyone feared from CSG, simply because Iris needs to take stock and allow organic corporate growth for a while.

Well I think the risk could be summed up fairly easily.
Let’s look at the last year or so, those of you who have experienced the CSG PR machine will have seen great promises made about legal being no different to any other software market and how their view of consolidation would bring great benefit to law firms. Vin would spout endlessly about being in the market for the long term etc etc. Well what’s happened, firstly let’s face it she didn’t stay around very long despite the promises and made a quick buck by passing on CSG to IRIS. For those that thought this type of consolidation would bring stability to the sector you have only got to read some of the posts to realise just how wrong that view was.
Taking the theme from the previous post if some commentators such as Mr White view a large supplier to the sector as a good thing then I think most Managing Partners are going to be very concerned. Monopolies are no good for any sector – for example most Managing Partners will tell you that dealing with BT and trying to have any type of commercial discussion is like to talking to the cows in a field.
For example if you look at the Law Society Survey it would appear that satisfaction with suppliers historically has been much higher than in other sectors. We should all think for a moment what the future could hold for Legal IT in 2/3 years time.
Firstly, there is no doubt customers of IRIS will have to pay for the significant debt their company is now burdened with and as has been posted elsewhere it will also be sold again in say 3 year time, so all strategic bets will be off once again. Firms will have to consider this in their risk assessment.
Law firms generally have enjoyed a direct relationship with the owners of their software suppliers. This in turn has lead to a sensible commercial relationship and prices for software and services are kept down and there is room for negotiation….once a monopoly exists you can forget this.
Ironically law firms should remember that the Legal IT sector faces the same challenges as the profession – some people would have it that legal services should be provided from your local Tesco’s or Bank and their IT from a company owned by an American Private Equity House with £500m invested and looking for a quick return out of you the customer rather than anything long term.

There is as fundamental difference between the way in which one might buy a standard Microsoft product and the way in which one purchases a practice management system.
It is quite possible to go into PC world and buy a copy of Microsoft Office without any maintenance or support contract, use it for as long as you feel like, and then replace it by buying an upgrade or alternative product when you are ready. You are under no obligation to purchase a maintenance and support contract from Microsoft, however, if you do (they call it software assurance) then Microsoft will continue to upgrade that software to the latest version providing such a contract is in place. At this point there is little difference from the support and maintenance contracts offered by legal suppliers with their practice and case management systems. As a result, a client of a legal supplier would have a right to assume that for their 20% a year, or whatever they are paying, they will continue to have a product which is actually worth upgrading, in the same way that Microsoft offer frequent upgrades to the office suite. Implying that an end of life is not a problem rather misses the point of the thought processes that go into buying a new system in the first place, and that is even before lawyers have looked at the cost of change indicated in an earlier post.
Many years ago I once offered the senior partner of a firm, who was using a competitor’s system, a free upgrade to our own product, provided that he took out a maintenance contract for at least 5 years with us. The partner concerned is a personal friend and considered that our software was better than the software he was currently using and for a brief moment was reasonably tempted by our offer. However, he soon rejected it when he considered how much management and staff time it would take to change all of his existing working practices over to a new system, a figure which he estimated to be somewhere in the region of seven figures. This prompted me to ask what would we have to do to our software that would make such a switch a worthwhile decision for him. His answer was illuminating and one which I have thought often since then. He basically said that in order for it to be worthwhile him switching, a new piece of software would have to be so much better than his existing system, with so many extra features and benefits that could save him money and improve profitability that the cost of purchase and the cost of change would be minimal compared to the additional money that he would be able to generate in terms of extra profits from making the change. It was his opinion that amongst the top suppliers there was probably no more than ten or fifteen percent significant difference between each application and, therefore, even though he considered that change would be a good idea there was never enough benefit in making the decision to do so. He pointed out that the only other reason that he would look to change his existing supplier was in the event that they decided to no longer support his current system, especially if the replacement system came at a significant cost. Even then he said he would feel aggrieved that he was effectively being forced to spend a huge amount of money on changing systems when he didn’t fell that there was any need to do so.
Solicitors cannot easily replace their practice and case management systems, although there are many that would if it was feasible to do so. This is reflected in daily life where there are a number of examples of suppliers that we have, such as banks, that we would like to change but often don’t because we fear the complexity of making the change. As soon as the status quo is broken by one party or another acting in bad faith, the desire and motivation for change can start surprisingly quickly.

Apologies for the delay in getting some of these comments posted. Although being based in East Anglia means we do avoid being many of the less attractive aspects of urban life (congestion charges, being poisoned in our beds by polonium spread around by loonie Ruskis who can't accept the lost the Cold War) the downside is the internet infrastructure frequently gives the impression of being about as efficient as cocoa tins linked by string.

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