The Audit is coming.
It’s just a question of when. Clients of Biglaw are talking about auditing their outside counsel’s technology. This is not an inventory of what technology a law firm is using, but rather an audit of how well the firm’s attorneys are using it.
The impending legal tech audit is a skills audit. D. Casey Flaherty, corporate counsel at Kia Motors America, Inc., sounded the alarm at Legal Tech West last year: Most outside counsel have no idea how to produce a document. Also at Legal Tech last year Connie Brenton, Chief Legal Officer at NetApp and President of the Corporate Legal Operations Consortium (CLOC,) a professional organization made up of Chief Legal Officers from Fortune 500 companies, rocked the auditorium when she announced that the billable hour is dead.
But before I get into the Dos and Don’ts to prepare for the impending tech audit, let me tell you a story.
Tell me a story.
Before 2007, law firms pretty much regularly upgraded their technology every 4-5 years, or so. In 2007 most firms ran Office 2003 on Windows XP when Microsoft launched Office 2007 on Vista. But in 2007 the music stopped (think: Jeremy Irons as Jamie Diamond in the movie, Margin Call,) and the legal industry consolidated (think: many firms tanked.) My firm tanked and I found myself unemployed (think: making a living as a contract trainer in legal.)
I always thought that if I was “let go,” I could make a living as a contract trainer in legal. But since that upgrade to Office 2007 didn’t happen as scheduled, I had to scramble. I joined ASTD (now ATD, Association for Talent Development,) the networking organization for learning and development professionals, and cast my net wider than Biglaw. I stayed up late reading magazines about knowledge transfer and the ADDIE model to develop learning content. I took a course on brain science to learn how adults learn. And I met contract trainers outside legal: Jane, a database programmer, Jill, who taught tech to corporate types, and Jack, an Apple genius. We called ourselves the A Team; we met once a week at the New York Sports Club on Lexington and 43rd. Actually, we met at the restaurant next door where Jack always got the baked potato with bacon and cheddar cheese, no matter what the time of day. Good times. We were a support group more than anything else. Over the next several years we rolled out upgrades for real estate firms and insurance companies, but no law firms.
Biglaw is in a productivity slump.
It wasn’t until 2010 that law firms, in general, invested in technology again, when Microsoft launched Office 2010 and Windows 7. But when firms upgraded, a funny thing happened: productivity slumped (as it always does after an upgrade) and stayed slumped long after the rollout ended. Though tech investment levels as a percentage of the U.S. economy have reached a 14-year high (NeoChange, 2012,) law firms continue to suffer productivity losses now, four years after the latest upgrade.
According to a NeoChange 2012 Adoption Insight Report, effective adoption rates have dipped and stalled at 52%. That means that half your people are not using the new tools. The NeoChange report calculates that law firms suffer persistent productivity losses averaging 17%. That means that all your people are taking Fridays off.
Efficiency pays.
Productivity losses translate into lower profits pretty quickly for law firms. Firms bill their clients for time spent. Under alternative fee arrangements, however, clients don’t pay for the amount of time attorneys spend to produce documents; but rather for the documents themselves. This means that efficiency can increase a law firm’s profit margin: the less time attorneys spend to produce documents, the more they get paid for their time.
It seems to me that firms should welcome their clients’ tech audits. Imagine, the NYSBA Report of the Task Force on the Future of the Legal Profession (April, 2011) informs law firms’ leadership, “…[your clients] may ask to speak to the relevant members of your team to ensure the right core technology is in place and that all timekeepers know how best to use it.” Sounds like a win-win: more value for the client; more money for the firm.
Be prepared.
Here are some Dos and Don’ts to prepare for the impending tech audit:
1. Do spend on technology that has high adoption rates, including the next shiny, new thing if people are using it.
Don’t spend on the next shiny, new thing just because.
Example: At our firm about one-third of attorneys use an iPad. We will roll out Office for Mobile on the iPad by mid 3Q14. Customize technology to best serve the business goals of the people who use it most.
2. Do spend on technology that improves value for the client.
Don’t spend on technology that doesn’t improve value for the client.
Example: Knowledge Management (KM) thinks it’s a good idea for attorneys to organize files by client-matter number. The DMS does that in the “Save” profile; however, KM asks IT to upgrade the DMS to accommodate folders that do the same thing. Client value here? (Too many acronyms here?)
3. Do focus training content on feedback from super-users.
Don’t focus training content on what squeaky wheels call the Help Desk for.
Example: Looking for training content in Help Desk tickets is like cross-examining the other side’s expert witness: The information you uncover is likely to insult your best witnesses. Don’t train people on features they don’t want to keep in their heads; that’s why they call the Help Desk in the first place. Train processes that your best people do well in the context of their business.
4. Do your research. Find out what processes are critical to business goals and invest in technology that can add value for the client.
Don’t create tech budgets in a vacuum.
Example: Ask fee earners, rain makers, heavy hitters what should be in IT’s budget next year. Uncover bottlenecks in the business process and spend to fix them.
5. Do train people who do the work.
Don’t train people who don’t do the work, or who you think should do the work.
Example: Stop training legal assistants (aka secretaries.) They are no longer producing documents. Associates are producing documents…and not very efficiently. Train/certify associates on tech skills. Efficiency provides more value for the client; and more money for the firm.
Here’s something to think about.
Scientists say that we use only a small part of our brain’s potential to think. It comes as no surprise that we use only a small part of the technology we have available to do our daily work. A tech audit reveals how small (or large) a part. “Thus conscience does make cowards of us all…” and lest we “…lose the name of action” (Hamlet, Act 3, Sc. 1) let’s do something about it. A tech audit will show us what to do. A tech audit focuses IT training and spending on higher adoption rates. What better way to increase profitability? A tech audit makes money for the firm. Simple as that.
So, impending tech audit? Bring it on.