Technology was the theme of the 15th Annual Law Firm COO & CFO Forum, yet an undercurrent of non-technological essential strategies emerged to assist law firms in these challenging times.
Even accepting that technology investment is now 8% of overall law firm spend (having grown 5.7% since last year according to Peer Monitor) what struck me were the other ways in which the delivery of legal services is improving—not through a wholesale switch of legal functions to technology, but primarily through a more tactical deployment of resources.
Changes to the conventional law firm practice model
In the eye-opening “2016 Report on the State of the Legal Market” presentation by James Jones of Georgetown Law and Gretta Rusanow of Citi Private Bank, the factors common to consistently profitable law firms were broken down. The practice of lateral hires, for instance, remains, though the outcomes for successful firms are markedly better than the success rate of lateral hires examined over the broad spectrum of all law firms. This demonstrates how success begets further success.
Similarly, the more successful firms are shifting away from associate utilization by employing staff and temporary attorneys. The law firm model isn’t dying, but it is changing to incorporate strategic deployment and employment of resources to more economically serve clients.
One non-tech fact was especially prescient: 24% of the consistently successful firms outsource non-legal research, whereas only 6% of non-successful firms do.
Where legal technology dollars are being invested
Much of the increase in technology investment—aside from the obvious security upgrading—is for systems that assist in the knowledge management and competitive intelligence functions of the firm. What at first seems a tech tsunami of innovation is really computer-aided assistance in efficiently categorizing and accessing collective firm, client, and industry knowledge to enable collaboration and cohesiveness for the attorneys. Ironically, it is often external or outsourced individuals who most efficiently support and deploy that growing research and knowledge management capability.
New focus on lawyer collaboration
As the breadth of the successful firm’s client-servicing efforts must expand to remain competitive (and provide greater value for hourly-billed-weary clients), the successful firm will need to deploy and rely on different voices to up its game. Indeed, this was one of the themes of Harvard professor Amy Edmondson’s closing day presentation on law firm leadership.
Law firm leaders will need to be more collaborative, working against the competitiveness and risk aversion instilled through legal training to foster an environment that lowers the cost of “speaking up”. This more inclusive leadership will thus be open to quicker execution of ideas.
Client loyalty survey results
For another view of the COO & CFO Forum, focused on client relationships and loyalty, I invite you to read this post from my fellow LAC Group colleague John Harbison, who moderated one of the panel discussions at the event: Loyalty: the holy grail of client satisfaction.