Predictions 2009: Technology and Strategy for Lawyers

December 11, 2008

From Peter Birley, Director of IT, Browne Jacobson LLP:

2009 will be a more difficult year with investment being curtailed in line with the recessional indications. This means that efficiency will remain The Big Thing, although there will be some investment in technology other than for efficiency in order to position firms for the end of the recession. Security will remain high on the agenda, particularly in dealing with the public sector, and so will risk and compliance issues.

This means that, on the cost/efficiency, side firms will continue with virtualisation to reduce the number of servers and the associated costs, software licence costs will come under the spotlight, as will the old chestnut of outsourcing (although to the enlightened this can be counter productive unless the technology department is very large). We may see legal process outsourcing grow as a number of firms have already put their toe in the water with this type of service.

New areas such as SAAS (software as a service) and cloud computing (servers on demand) could be on the agenda but think it is still a bit early for these in the legal space, although some firms are using it for e-mail security and e-discovery type services. However for smaller firms a full SAAS service with all applications delivered over the internet and paid for on a flexible usage basis could be attractive and a number of vendors are now starting to offer this facility.

Security requirements will see more encryption technologies being deployed at hardware level, for instance laptops being encrypted and software such as e-mails being encrypted. End-point security will become more important with firms looking to close down USB and other entry points to the network.

The ‘less paper’ environment, which can both reduce cost and offers a greener approach, is back on the agenda with lots of firms looking at this but it won’t be without pain: lawyers like paper. It will put pressure on storage as more documents are scanned and we will see an increase in storage demands over 2009 and beyond as a result.

The push for efficiency and reduced office space will see home and mobile working continue to grow and with voice recognition improving every year we will see this creeping into the work place and eventually being available on mobile devices to create and control e-mail without having to type!

Other areas that I predict are (i) further use, at business level, of collaboration and social networking and (ii) the continued move to unified communications to enable flexibility as people move around and to bring together all forms of communication. 

From Charles Christian, Editor of Legal Technology Insider

It’s the economy stupid. Any legal tech related predictions for 2009 must be qualified by the big unknown of the state of the economy. If law firms are worried they may not be around this time next year, they are not going to be investing in any new IT systems. Apart from those firms that are having to migrate to new systems because either their legacy systems are on their last legs – or they have lost all faith in their legacy suppliers (and there are plenty of those around at the moment) – just about the only thing anyone is likely to be buying are systems that can demonstrate a rock solid financial return on investment. And that means actual cost savings rather than woolly efficiency benefits.

I think it is also likely that investment in ‘green’ IT initiatives are going to be shelved for the immediate future. In recessionary times, lawyers are going to focus on saving their firms and their jobs, rather than saving the planet.

However one technology we will hear more of in 2009 is cloud computing – it’s the next logical step on from SaaS (software as a service) – particularly with technologies such as RIA (rich internet model) and EC2 (Amazon Elastic Compute Cloud). And, if £sterling keeps on its downward trajectory, IT suppliers may also be having to change all their systems over to euros.

From Paul Heritage-Redpath, Product Manager, IRIS Law Business, IRIS Legal Solutions

Computers and law in 2009. Let’s say there are some ‘creative tensions’ between the two given the current climate of recession.

The first is between data security – for client confidentiality – and the trend for mobile working, which will only accelerate as firms seek to shed expensive offices while lawyers look to pare back an increasingly expensive commute.

Specifically, Software as a Service is attractive when looking to cut hardware costs and enable mobile working: attractive apart from the idea of someone else holding your accounts and the data of your clients, that is. There may be a gap in the market for encryption; but quis custodiet ipsos custodes? The reputational loss for a law firm of a government-style ‘Whoops there goes my memory stick’ mishap is horrible to contemplate.

The next tension is between law firm’s clients wanting to pay less, whilst receiving improving and 24/7 service. For how much longer will the profession, Canute-like, be able to hold back the tide of self-service, and the reasonable requirement of clients for online visibility of their documents and billing details? Yet how will this major infrastructure change be funded as fees fall steadily?

Robust and secure high-availability Web applications have proven tough for even the likes of Apple and Microsoft this year with very public failures in MobileMe and Hotmail. Moving from a static brochure site to a secure Web application platform is surely the next challenge for IT directors. Adapting support contracts to cope with liability in a world of inter-operable Web components may be the coming challenge for IT vendors.

Finally, firms will now expect their Practice Management Systems to do exactly that – provide much better visibility of where cash is coming from and where it is going. There is room for improvement across the board in providing business intelligence tools to law firms. That means investment by vendors and clients alike – and the need for innovation comes at a time when there is least cash to pay for it. Tricky times all round.

From Alastair Morrison, Strathclyde University and commentator on IT in legal practice

Cloud computing and SaaS technologies will develop apace and become increasingly part of our business and personal IT lives; whether we like it or not.

Richard Stallman (founder of the Free Software Foundation) does not like it. He believes cloud computing is ‘stupidity’, that ultimately will result in vendor lock-in and escalating costs. Others disagree. But no matter what your view the fact is that the developments and strategies of the IT giants clearly demonstrate that this is the course they are taking. For example, there is Google’s Chrome ‘browser’ (‘not just a browser, but a vehicle for delivering web applications’), or Microsoft’s Windows Azure (‘a version of Windows that runs over the Internet from inside Microsoft’s own data centres’).

The economic slowdown will further raise the appeal for firms of all sizes of SaaS, and so 2009 will see more firms investigating what subscription based online services are available and whether they are right for at least some of the things they do and some of their staff.

From Dan Speed, Marketing Director, BigHand:

Obviously as a greater burden falls on remaining staff, with recruitment ceasing for many firms in the short term and potential restructurings having taken place, tools that allow professionals to take on more fee earning work with no associated rise in administrative costs will be attractive. The push for set fees over hourly billing also continues – Microsoft’s letter to its panel lawyers in July 08 was noteworthy here – with increased demand to get more done by delegating work to lower cost lawyers, paralegals and assistants. Additionally it is likely that, if and when any recovery takes place workloads will increase in advance of recruitment kicking off again in earnest, and technology that supports the ability to deliver quality legal services in that environment will have value. One of the specific tech areas I think you will see continued investment is the push to mobilize key staff, allowing them to get more done in the same amount of time by opening up those out-of-the-office work opportunities (via BlackBerry, iPhone, and Windows Mobile devices) in order to maximize their working day. We have already seen a growing use of BlackBerry devices to expedite the billing cycle in the legal sector this year. IT-industry wise it is also a theme that technology infrastructure approaches that offer potential cost saving and organizational flexibility are attractive, with software-as-a-service technology platforms a logical next step.

From Joe Reevy, Director, Best Practice Online

I predict that 2009 will be the year when mid-tier firms stop talking about seeking value for money with their IT investments and actually start doing it. By this I mean they:

(a) start making sure they have the right sort of information to make sensible decisions – a huge weakness of most practice management systems; and
(b) decide that those partners who brag that ‘I don’t even know how to turn my PC on’ are an expensive luxury they can afford to do without

I also suspect it is a year that IT problems will be one of the main reasons (although not by any means the only one) that they will start to regret being stampeded into merging with another firm.
Lastly, I hope it is the year that the majority of firms realise that using IT to outsource ‘non-law’ functions (such as marketing) is a complete no-brainer.

From James Tuke, Head of Research, Intendance –

As in previous years, I’ll tackle this question from the online perspective. I spend much of my time in discussion with marketing, BD and web teams in law firms and there’s been a sea change in attitude recently. Conversations have shifted from the aspirational ‘what more could we be doing (full stop)?’, to the prudent ‘what can we do with what we’ve got?’. Most firms are facing budget freezes and cuts next year, so they are being compelled to review many areas of their online comms strategy – and wider business plan.
I think two priorities will come increasingly into play in the context of ‘online’ over the next 12 months: cutting costs and adding value.
The former will be driven by the need to get more for less. Web teams in firms are being pressured to cut costs and it is no coincidence that we find there’s a growing interest in our Open Source systems for content management and other applications. Even in the largest firms, search engine optimisation is also becoming a hot topic as web teams seek to squeeze as much value out of their public-facing website(s) as possible.
The need to add greater value is driven by many factors, not least the heightened level of competition created by the current economic turbulence. In the web context, the provision of client-facing online services – both knowledge-based and transactional – can help streamline workflow and differentiate a firm significantly.
As firms work to strengthen existing client relationships and build new ones, smarter use of ‘online’ generally will remain a top priority. It’s now a well-established medium, but firms are still only beginning to wake up to the full potential of the Internet. I expect to have many more conversations in 2009 about putting the maxim of ‘smarter not harder (/more expensive)’ into action.

From Julian Uebergang, Executive Director at Epiq Systems, a specialist e-disclosure company and provider of technology solutions

Maximum efficiency with minimum impact
The 2008 financial crisis and resultant pressure on IT budgets will force law firms and service providers alike to maximise the use of existing infrastructure. Techniques such as ‘server virtualisation’ and ‘load balancing’ will be critical in ensuring that every ounce of existing CPU power can be utilised. Law firms will look to maximise energy efficiency by implementing effective data compression and storage solutions as a means of reducing electricity and cooling overheads. Cost effective backup solutions will be essential from a risk management perspective.

Law firms should focus on the following three IT objectives to help achieve greater efficiency during 2009:

(a) scrutinise costs to achieve an optimum in-source/outsource balance
(b) maximise the use of existing IT infrastructure
(c) implement automation to reduce human cost.

From Linda Webster, Head of IT, Wedlake Bell:

Lawyers now accept that IT is a business critical tool and no longer consider technology a ‘necessary evil’.   This change in attitude is crucial in allowing businesses to embrace new technology and explore ideas about how systems can assist in working more smartly.   The shift is partly driven because law firms now see themselves as a business, and partly by the fact that computers are accepted as a component of our daily lives.  Firms are looking closely at every area of the business from how clients are attracted and retained to the methods in which work is produced.   This gives those working in IT an opportunity to use systems in an imaginative way.

I think that the following will become increasingly significant in law firms next year:

  • Software as a Service.  Historical reluctance to allow information to reside on servers which are not under the control of the firm is diminishing.  Many firms use on-line backup and external email scanning and storage solutions, so taking the next step has become easier to contemplate.  Cost implications will be the driving factor in the uptake of this model.   
  • Web 2.0.  Firms will utilise social networking tools in order to maximise relationships and collaboration within and across teams as well as with clients.  Different ways of working and of delivering applications and information will continue to be explored.  
  • Profits and IT. Firms will look towards IT in order to maximise profits, implementing systems which will save time in getting work done.  Systems should be implemented with a view to ease of use and the minimum of training required.
  • Unified messaging. Adoption of this will increase.  The ability to consolidate telephone systems with the computer desktop is compelling.