Law Firms Employing Good IT Solutions Likely to Be 2023’s Biggest Winners
Thomson Reuters Institute recently offered a look-ahead at what could be in store for attorneys this year. You can read the entire forecast here—and I encourage you to do so because I think you’ll find it quite an informative relative to your practice.
For my part, though, I’d like to zero in on just one of TRI’s predictions and offer my opinion as to how a strong information-technology underpinning can help you leverage it so that you can maximize income, operate more profitably, and—above all—avoid becoming a cybercrime statistic in 2023.
I have always believed that information technology—the right pieces of equipment leveraged correctly—can help you attract and retain clients. Repeatedly, I have seen how a strong IT component helps a law practice grow and be successful, while a weak one can have the exact opposite effect. Done correctly, your IT component will give you more time and freedom to do what you do best, and that is serving your clients.
Efficiency = Profitability
According to the Thomson Reuters Institute’s 2021 State of the Legal Market report, the legal industry faces ongoing pressure to improve efficiency and control costs, with clients demanding more value for their legal spending. In 2020, for example, law firms saw their expenses rise by 3.1%, while revenue remained flat, leading to a decline in profit margins. The report notes that to address this challenge, firms are looking to technology to streamline their operations and make their lawyers more productive.
Recent surveys from Thomson Reuters support this view. For example, a survey of legal professionals in 2021 found that 60% believe that technology will be the most important factor driving efficiency gains in the legal industry over the next three years. Another survey conducted in 2020 found that firms that invest in legal technology and innovation grow their revenue and profit at a faster rate than those that do not.
To achieve efficiency, you need information technology. And not just the raw technology, but sophisticated solutions to go with it. Here’s the rub, though. Your chances of finding, implementing, and maintaining those good solutions on your own are pretty slim.
Don’t Try This On Your Own
The fact is that attorneys who try to do their own IT are no better than those foolish laypeople who—accused of a felony—imagine they can represent themselves in court and obtain a verdict of not guilty.
At best, your IT skills are likely to be no greater than those of a serious hobbyist. As I’m sure you know from dealing with expert witnesses, achieving expert status in any field takes tremendous time and effort. Setting up a Mac is easy—pretty much anyone can do it—but knowing all the steps that should be taken to optimize that setup for maximum efficient use is another matter entirely. Ditto concerning security safeguards intended to thwart hackers and ensure recovery of data that become corrupted or lost (whether by criminal action or accident).
Because IT requires expert care and feeding, I advise lawyers to seek out a third-party managed services vendor to whom the IT component can be delegated. If you can hand off to actual IT experts the responsibility for tracking down, installing, configuring, updating, and (if necessary) replacing those good IT solutions, you’ll spare yourself enormous amounts of frustration—and likely save significant sums.
Training is Essential
However, good IT solutions—no matter how they’re sourced and activated—are only as good as those using them. By that, I mean IT solutions are ineffective if the users aren’t adequately trained in their operation.
Look at it this way. Training yields increases in operational skills. Increases in operational skills yield productivity increases, delivering cost savings and, ultimately, higher profits.
Recent research from the Thomson Reuters Institute supports the importance of training in improving law firm efficiency. In a survey of law firm professionals conducted in 2021, 63% of respondents reported that their firm could benefit from more technology training. Additionally, another survey from 2020 found that firms that invest in training for their attorneys on legal technology and process improvement report higher profitability.
Change of Mindset Called For
Sadly, good IT solutions often prove elusive for many law firms. I believe this is because those firms’ leaders don’t have the right mindset about technology. They see it as a necessary evil and treat it as something to be kept at arm’s length, even though it quickly becomes part of the law firm’s lifeblood.
These leaders need to change that mindset to one allowing them to embrace technology as an invaluable asset that can very effectively help control expenses. Not to put too fine a point on things, but the better the IT systems you have in place, the more efficient you can be. And, in 2023, if the Thomson Reuters Institute’s crystal ball is correct, efficiency will be your key to genuine success.