Guiding Principles for Technology Investment in Law Firms

February 22, 2010

If you are responsible for the overall financial or operational efficiency of a business, major system changes seem to come your way.  Whether the firm is growing and needs more structured, sophisticated processes or the firm is striving to maintain profitability or long-term efficiency, a major technology investment will be required.

New technology investments involve many complex issues and outcomes and are usually expensive.  On a professional level, careers can be made or “altered”.  The process is never perfect, it often takes too long and the new system can end up being way too expensive.   The work is gruelling, detailed and sometimes thankless, even after the software is in production.  The worst outcome is technology which does not perform at the promised levels.

Over the past seven years, we have completed five full system deployments, four supplemental integrations of software and five secondary data conversions in the law firm environment.  We mention this not to boast or solicit sympathy, although sympathy may be warranted, but to let you know that we have had the opportunity to study this topic in depth and from many perspectives.  These projects always represented exciting challenges and came with great expectations.  

So, here we go again.  Another law firm, a rapid growth strategy in place and a few mergers.  A major system change is necessary and currently ongoing.  As we formed this most recent implementation team, we decided to pause and reflect on some of these past projects, all of which imparted important lessons.  We have seen the good, the bad and the ugly (with all due credit to Clint Eastwood).  We realized that we had done enough projects to recognize recurring themes leading to pitfalls or successes.   Our musings are from the point of view of the manager and the user – in other words, from the operational point of view.  

One can employ guiding principles in all aspects of life. When such principles are applied to implementing a new technology, you may be surprised by how easy it is to focus and make the necessary hard decisions.  These principles apply throughout the project, including initial discussions with potential vendors. 

Our guiding principles were formed with two objectives:

  • a seamless transition for the non-accounting users
  • an effective operational system within a reasonable time and for a reasonable cost.

These objectives may sound obvious but, as the battle seasoned-know, meeting any one of them is really hard to do.   

1. The Team.  From a technical perspective you will have the best of the best IT and accounting personnel on the project team.  But there is another important aspect to the project team which will determine the success of the project, ie leadership which fosters mutual respect between IT staff and, in our case, accounting staff.   When respect is present, the friction, disagreement and tensions are reduced because respect usually results in the acceptance of the other’s professional judgment and it is that professional judgment which is critical to making progress and resolving difficult technical issues.  We have such a team and our progress has been remarkable and, to the degree that solving problems is a pleasure, this has been our best experience yet.

2.  Performance.  Slow new, expensive (or less expensive) systems are not good.  You really need to understand the technical specifications of the software and the hardware.  Focus on your most important functions and then understand the performance you need and whether or not your choice will deliver.  One of our most important functions is fast, flexible and user-friendly time entry.  Several options promised the desired functionality and speed but when our IT team tested the configurations, the systems did not perform as marketed.  To guarantee performance, our IT team architected the hardware to complement the software choice which has the ability to be ‘tweaked‘ to elicit the necessary performance in otherwise slow areas, ie database recall and connectivity. 

3.  Avoid gluing pieces of software together.  If there are processes that feed one central need for reporting or transactions, you really need to find a common IT platform to get this done.  The benefits are huge; fewer integration issues, less maintenance with fewer upgrades, less custom code, and fewer staff programmers.    If your IT project support pauses at the idea of a common platform, you do not have capable professionals as part of your solutions team.   For our project, we first identified the input and output needs of the non-accounting user, such as time entry, workflow forms, and web based reporting and then measured our software choices in terms of these needs.  We found a common Microsoft platform that allowed us to integrate the accounting software with the very flexible SharePoint server to meet all non-accounting needs.  The SharePoint – Accounting Software moulding has become a ‘one stop shop’ for all business input and output with real time database write back.  We have completely avoided plugging a workflow product into a web based reporting product and the custom feeds necessary to update data.

4. Plan and implement in phases.  You will be more likely to manage expectations, if you plan and implement in phases.  After you establish your phases, carefully outline the elements and objectives of each phase.   Whatever phase you are in, remember the rules of the phase.  There will be times when you want to move out, expand, add.  Do not do it.  Stick to the plan.  For example, Phase I should be about the basics.   For us Phase I is ‘go live‘ but only with the basics.  Yes, including only basic reports.  Don’t strive for the ‘go-live’ WOW factor.  Phasing allows you to gain operational efficiency while easing all users into to a new method of performing transactions. 
Budgets should also be prepared and reviewed by phase.  The financial planning for a new technology is a complex exercise but if you budget and review in phases, the project is more manageable, the financial constraints are easier to meet and problem areas are highlighted sooner and it will be easy to answer questions like, what did we get for this money?  Why did we go over/under budget?

5. Manage your expectations and those of others.  Stick to the stated goals of each phase.   Do not let the “DEMO” influence your decisions.   In Phase I, understand what you need to perform at an excellent level but without too many, if any, ‘bells and whistles‘.  Instead, these should be added in a subsequent phase.  Too often the most innocuous choice, unsuccessfully executed, can exhaust the team, the budget and the enthusiasm of management.  If you have chosen wisely, your technology can WOW where it counts and in Phase I. 

6. Design familiar, user- friendly screens for the non-accounting user.   While familiarity and being user-friendly are important to all users, the accounting staff will adapt more easily to some change.   If you succeed here, you will succeed in calming a lot of fears.   In a recent conversation with a firm partner we were able to allay his fears by assuring him that none of the input screens used by fee earners and staff would change.  For our project we were able to achieve this condition by phasing the project.  The degree to which you can achieve familiarity is worth the effort.  The back-end can be somewhat less user-friendly and does not need to be perfect at the outset. 

7. Keep the processes simple for the non-accounting user.   Whether it is time entry in the law firm environment or expense reimbursement forms, a simple, elegant process is most important for this kind of user regardless of the software you choose.   If the input requirement is more difficult than absolutely necessary, the water cooler press will not be good and perhaps will spill over and affect other aspects of the project.

8. Reports.  Phase I is about basic reports.  Elaborate productivity and custom reports should be left to a subsequent phase.    Actually if you really probe, you discover that the reports you want and need are not available without further investment of time and money.  Why raise expectations and frustrations and add another layer of complexity to the initial implementation?    Be content with the good bones of a great system and then you can get fantastic reports in the subsequent phase because you can focus on what you want and how to get it.

9. Manage staff expectations.   This is a huge lesson learned.  Of course, the project accounting team is totally immersed in the software, processes and testing.    Change management is important and necessary but until you are very close to the end-user training stage, understand that the idea of working with new software for most of us becomes more overwhelming the more you think about it.   There are ways to involve the staff with frequent, high level progress reports which are not threatening,.  Dwelling on “how is my job going change” and “how much extra work is the testing going to be” negates any positives that come from involving the staff too soon. 

10. Stick to the plan.  Stick to the plan and the schedule.  Get past setbacks, quickly.  Do not dwell on what could have been.    It is what it is and the team needs to move on ,and on and on, to progress.

So stand on these ten principles, and we mean stand as if your feet are cemented into the ground.  Review the principles at the start of each project day.   Follow the plan, stay focused and you will reach the goal, in other words ignore any energy pulling or pushing you otherwise.

Tiffany Dutton, MBA, is the Controller at Novak Druce & Quigg LLP.  She has 11 years of experience in law firm financial analysis and management.   Prior to her career in law firm management, Ms. Dutton worked as a consultant in litigation damage analysis. 
Barbara Preston, CPA, MBA is the Chief Operating Officer of Novak Druce & Quigg LLP. She has 15 years’ experience in law firm management.  For ten years prior, Ms. Preston was CFO for a research firm supporting federal agencies including the Department of Energy and Department of Defense.