IT and the smaller firm – Are we missing out?

In the third article of this new series aimed at the smaller law firm, Tom Paul explores the difficulties around the final decision to upgrade.

So far we have thought about the advantages, and we have considered the difficulties in making the decision to invest in IT.  Last time we considered the decision-making process and I outlined some of the key things that you will need to have thought about as you approach the big matter of upgrading your IT systems. Today I will try to lead you on through the final decision-making process and then to what happens next.

At this stage you are getting close to choosing your partner for software, and perhaps also hardware, and I use the word “partner” very deliberately. Your IT is such a key element in the work of your practice that whoever you decide to work with simply must be highly experienced and totally dependable and willing to work with you rather than merely supply you.

• They must be specialists and must be able to demonstrate a long track record of supplying and supporting law firms, with their particular needs. You need to ask some searching questions and to insist on honest answers – any hint of evasiveness should ring alarm bells in your head very loudly.
• They must be able to introduce you to existing clients and be willing to set up site visits. Most firms, in my experience, are only too willing to share opinions and experiences about IT. We all see it as challenging and while we may compete fiercely for clients the co-operation between firms over many other things is usually excellent. 
• They must be in possession of sound feedback data from clients and they must also be stable financially. This last point is crucial – you do not want to spend thousands on a new system only for the supplier to go into liquidation and be unable to provide ongoing support. 
• Picking up on this question of support, the suppliers on your shortlist must be able to demonstrate really excellent support systems. These installations are complex and your own people will need easy access to skilled guidance from experts that really know them inside out, and they will also need immediate reaction. Ask about response times and make sure that they meet your needs, as a stopped law office is a costly thing.
  

Having found companies that meet these vital criteria we can then begin to compare them and their products. You need to decide what you want of your IT now and to keep firmly in mind that the lifetime of your shiny new system could well be some five years or so. Technology moves on fast. Your supplier will improve their systems continually and you need to know whether upgrades are provided automatically, whether you need to subscribe in some way for them, or whether they only come as a cost option when they become available.

At this point I must touch on some of the latest remote features. I mentioned the fear factor last time. Lawyers approach every decision with a mindset that has been honed over the years to look for possible problems. In their training and then in almost all their work, whether contentious or non-contentious, they are responsible for anticipating difficulties and disasters that may or may not happen in the future and the result is that they become very cautious. They tend to give the worst case scenario a great deal of weight and dismiss potentially huge advantages as a result.

The upshot is that they can be terribly over-cautious about features such as remote access for staff and progress information for clients. These features can bring enormous benefits and huge flexibility so I believe they need grabbing with both hands. If your partners can be persuaded that the risk these days is truly very small, and that the potential benefits are huge, you may be able to take full advantage. If not you may end up denying yourself many of the key benefits of the latest systems. After all, when you buy a new car would you consider one with a top speed of only 40 m.p.h. simply because you are less likely to hurt yourself in a crash at that speed?

If we are to remain competitive against the likes of “Tesco Law” we are all going to have to get seriously good at efficiency. The average high street firm still operates with too many staff and with too many inefficient practices. More routine work needs to be done by the more capable support staff, for example, and you need to build flexibility into your structure. The best new IT systems will have features that can help enormously. It is well worthwhile studying them with care and making sure that you buy something that can really serve your business, both now and into the future.

You will eventually (and it is worth giving it time) come down to a preferred system. You will have seen it in action and talked with current users and you will have thrashed out an acceptable package on price, both initial cost and ongoing support costs. Do be clear about who will look after your new system – as I said, it is no good having something that cannot be fixed really quickly when necessary.

You will then need to consider how to pay for it. If you have a good relationship with your bank this may be the best option. Lease packages from the major finance houses such as Lombard and GE Capital tend to come at true interest rates of around 11 to 13%, whereas banks will often lend at a third less. Overdraft-style funding or flexible fixed term loans, where you can pay off lump sums without penalty and pay interest only on a daily basis, are attractive. Be aware of the total you will pay over the term and be wary of offers that talk only in terms of “cost per £1,000 financed”.

Finally, you only have to convince your partners.....................


Tom Paul is a consultant specialising in the management of small and medium-sized law firms. More about his approach can be found at www.profitablepractice.org.uk

Published on: 30-05-2007