Seven Legal Tech Inefficiencies Silently Sapping Law Firm Marginsaderantuser
The vast majority of law firm leaders believe pricing pressures, competition and the need for efficient legal service delivery are permanent trends. That’s according to the 2016 Law Firms in Transition report by Altman Weil.
In other words, this is the new normal and demand for legal services will never return to the pre-2008 recession levels. If the market isn’t growing, then it’s essential to maintain profits through market share and efficiency.
“If the market isn’t growing, then it’s essential to maintain profits through market share and efficiency.”
Yet, law firm leaders are so busy in the day-to-day of solving client legal problems, few have time to step back and really reflect: Where and how can the firm better organize people, process and technology to boost efficiency?
We’ve identified seven areas in legal technology that are silently sapping law firm margins.
1) Disparate sources of case and financial data. Managing client data in two different systems creates inefficiency when the data in one system conflicts with the other. Reconciling the differences is both labor-intensive and time-consuming. Like Murphy’s Law, this question has a tendency to arise at the most inopportune time – such as when a partner asks for a report in preparation for a client meeting.
2) De-centralized case and client information. Client information that is stored and managed across attorney email or spreadsheets is a pitfall in client service. It prevents the firm from providing clear client updates about cases, documents, deadlines and budgets. The decentralized storage of data also introduces the unnecessary risk of losing client information.
3) Barriers to collaboration. Disparate data sources prevent shared understanding and create barriers to collaboration. By definition, silos separate data and slow process. For example, discovery requests locked inside a spreadsheet maintained by a paralegal on a local hard drive is a good illustration. The rest of the team cannot access the information and therefore cannot gain a shared understanding as to the timing and steps that move a case into the pre-trial phase.
4) Risk of missing critical deadlines. Decentralization leads to disorganization and grows the risk of missing critical deadlines. Modern legal technology enables a law firm to build process templates that keep projects on track. For example, an insurance defense firm can build a workflow process for high-volume cases to meet deadlines with claims adjusters or to provide case assessments.
5) Heavy reliance on manual processes. Sorting through a list of folders and files to ensure the firm is sending the most current legal document is a waste of time. Yet this style of ad-hoc activity persists and results in a high volume of emails, phone calls and team meetings in order to check and double-check on files, tasks and deadlines.
6) Difficulties maintaining in-house custom solutions. Custom solutions are often cobbled together from existing technology implementations, which were initially designed to support other processes. This often forces law firms to force-fit how staff works into the technology, rather than using technology to improve the process.
7) Continuous improvement in operational efficiency. In the absence of a mechanism to manage both case work and process efficiently, law firms are making educated guesses on pricing. Leaders need systems and processes to better understand how to best budget and staff cases. This enables the firm to offer both competitive prices and continuously improve operational efficiency.
Where to Begin Improving Efficiency
These inefficiencies all point to a case management solution as an ideal place for law firm process improvement and for two very good reasons:
First, case management is at the very center of everything a law firm does to deliver legal value for clients.
Second, and perhaps more importantly, new advances in technology have integrated financial data with case management data to provide one place for law firm attorneys and staff to find all the information they need about a client or case.
Note: This blog post is based on a white paper titled Efficiency is the Future of Law: the New Role of Modern Comprehensive Case Management Technology in Competitive and Profitable Law Firms. The white paper may be freely downloaded without registration in PDF format.