Investing in Computers – Using Surveys to Obtain the Comfort Factor

August 31, 1998

Legal practices continue to invest substantial sums in technology in thehopes of improving practice profitability and providing enhanced clientservices. These hopes can be realised where the practice has clearly identifiedits objectives before making any investment decisions. Only in this way willcomputer investments provide the positive gains that the practice deserves.However, a system which is right for one practice is not necessarily the correctone for others.

There are many surveys undertaken to assess what systems and technologies arebeing utilised. These are valuable in illustrating what practices are investingin, how technology is being used and indeed whether these investments aredelivering tangible financial results. Any survey viewed in isolation will onlyrepresent a sample of practices at a point in time. It is of greater use ifsimilar surveys undertaken over a period of years can be used to interprettrends. In this way it is possible to assess investment decisions and understandhow the changes that occur in the computer market place lead to differentinvestment decisions.

It is therefore interesting to compare the results of the 1995 and 1998LawNet/James & Cowper survey. This survey was carried out with the help oftheir members and similar sized practices. The 1998 survey included resultsreceived from some of LawNet’s own members (27) and other legal practices (25),giving a total response of 52 practices. This represented 526 partners and morethan 1,200 other fee-earners. The three-year period between surveys has been oneof significant changes for both the legal profession and the computer industry.So what conclusions can be drawn from the computer investment decisions of theprofession over the last three years ?

Current Computer Usage

As expected the results show that computers have now encroached into mostareas of practice. However the 1998 survey has, surprisingly, not shown asignificant increase in computers being used directly by legal staff – stillonly 33% of the practices are providing computers on all partner desks. Theresults are only slightly higher for non-partner solicitors and paralegals, bothat 36%. It is interesting that these percentages do not differ greatly fromthose of 1995.

Over the last three years nearly all the computer suppliers have introducednew Windows-based systems that assist fee-earner computerisation. The fee-earnerdesktop has become one of the new buzzwords. So with all this hype why is therestill a reluctance to embrace this technology ? The fee-earner desktop system ofmost suppliers offers:

  • access to accounts enquiry and reporting
  • access to direct time recording, often utilising computerised stop watches
  • the ability to draft billing information
  • an ability to link into their case management systems.

For many practices the introduction of such systems requires radical changesto the structure of fee-earner working. These systems really require adoptionacross the whole practice to work well and are best introduced as part of anagreed strategic programme of change. In many practices the delivery of on-goingclient service and the different personalities of fee-earners make it difficultto broker such changes. It is also very clear that the successful practices haveneeded more than one fee-earner to champion the cause.

However, common working standards are becoming more necessary as practicesmove towards the adoption of quality standards. There are many working standardsand accreditation schemes that the profession can now embrace – Investors inPeople, ISO accreditation, Legal Aid Franchising and now Lexcel. All these arefacilitated by a common approach to working practices that can be assistedthrough the correct implementation of fee-earner computerisation. Indeed oursurvey identified 56% of practices already using computers to assist them inlegal aid franchising. It is clear that the requirements of Lexcel will furtherincrease the use of common practice standards based on computerised systems.

The survey identified conveyancing (38%) as still the most common legalservice that practices choose to computerise. However case management is nowbeing introduced into probate (27%) and general litigation (25%). It wassurprising that the survey showed a low penetration in PI (8%) and matrimonialwork (6%). This general reluctance to utilise case management systems persistseven with the practices that provide screens on the desk of every fee-earner.The true electronic office is still far away as no surveyed practice currentlyscans incoming post, 26% use computer-based fax facilities and only 28% ofpractices have any form of electronic document management systems.

It is noticeable that more practices are now using direct input methods fortime recording. This is to be expected with computers becoming available morereadily on fee-earners’ desks. These computers are also being used for gainingaccess to accounts information and monitoring billing and time targets. Inaddition these computers are used to gain access to central precedentinformation. 52% of fee-earners who have computers on their desks now edit theirown documents.

The Underlying Operating Systems

Computer systems are now dominated by the provision of networked PCs. Thedays of a central legacy system running dumb terminals may have passed but manypractices (38%) still link back-office Unix systems into their PC networks.Judging from this survey the network operating system is still predominantlyNovell. Most of the legal suppliers have now joined the Microsoft NT bandwagon;this is now beginning to filter through as most new or replacement systemsshowed a migration to NT solutions. These new systems are also seeinghigh-powered Pentium II computers becoming the normal desktop computer forend-users.

Nearly all the responses indicated a use of Microsoft Windows for desktopcomputing. The majority of practices are still working in a mixed Windows 3.xand Windows 95 environment. However, 31% of practices now use Windows 95 on alltheir machines.

It is a concern to note that 386 processors are still in use at 40% of thepractices. It is vital that practices consider carefully the implications of themillennium bug as the bios of these machines is not likely to be millenniumcompatible. The millennium issue is still not recognised by all practices, as15% had not yet planned for the millennium. Although most suppliers, throughdirect communication, have addressed the millennium issue with their clients,some still have outstanding issues, including the use of light pens, thatrequire resolution.

The importance of computer systems to deliver information is borne out by thefact that all multi-office practices included in the survey had providedcommunication links between their different office locations. These varied frommodems to ISDN dial up and leased lines.

Who Controls Computers ?

As computers now enable the delivery of business objectives, it would bereasonable to expect the control of computers to reside in the hands of thepartners. However, this was the case in only 63% of respondents, in otherpractices computers are controlled by the practice manager (25%) or a specificIT manager (12%). Computer-based personnel are now employed in some manner by71% of practices.

The complexity and importance of computer systems has grown over the lastthree years from back-office systems to the inclusion of fee-earner casemanagement systems. As a result, many practices have turned to consultants toassist them with IT matters. In addition, as would be expected, internalunderstanding of IT has increased significantly since 1995 through subscriptionsto Legal Technology Insider (44%) and membership of the Society for Computersand Law (47%). The 1995 survey showed little evidence of internal computerexpertise.

Most practices now have a computer strategy (82%) compared to only 72% in1995, although there are still a significant number of practices that have notaddressed millennium or disaster issues. The survey did not consider thepotential impact of the Euro on legal practices but this is likely to become avery important issue in the next two years.

Exploiting Integration and Client Information

For a long time suppliers have been preaching about making use of your clientdata. Client marketing databases have been notoriously difficult to maintain asit is very difficult to get all members of the practice to ‘buy into’ thekeeping and recording of single source information. Only 40% currently useclient information for marketing purposes. This percentage is bound to increase,as integration becomes easier.

It is clear that Microsoft Office is now generally accepted as the leadingtool for general word processing, presentation and spreadsheet applications.Microsoft Word has certainly taken over from WordPerfect as the staple tool forword processing. At the moment Microsoft Office is, in many cases, becoming theglue that provides the immediate integration for the analysis and use of clientdata. Suppliers are now also beginning to provide the tools to link systemstogether and make use of standard reporting tools like Crystal reports.

As the use of client data increases the greater capacity of storage nowavailable will enable the practices to build up a ‘cradle to grave’ historyof their clients. Today this is not being exploited as the survey showed only11% of the practices using wills and deeds systems for marketing purposes.Investment in the storing and manipulation of client data can bring immediatecross-selling opportunities for legal services.

Increased IT Training

As the legal profession becomes more dependent on computers, it is verypleasing to note that 83% of practices now carry out IT training when newsystems are introduced. It is surprising that in most cases this training iscarried out by the system supplier (77%) even for general application softwarelike Microsoft Office, but with assistance from internal staff (44%) and otherexternal third parties (44%). There is little support for the use of personaltraining techniques – use of video/electronic (8%) or textbooks (13%).

Use of the Internet

The last survey in 1995 made no mention of the Internet. Its increasingimportance can now be seen by this survey with 63% of the practices having atleast an e-mail address and 75% of these including this address on their officestationery. In this survey, 33% of responding practices already have their ownWeb site with a further 27% planning to have one within the next 12 months. Thisis clearly the major growth area in computer usage over the last three years.

Practices do not, in most cases, possess the skills to develop their Websites internally. As with most businesses Web sites are being designed andmaintained by specific design companies. As yet there is no evidence of Internetaccess for legal practices being provided through one specific Internet ServiceProviders.

Many practices are concerned about Internet security and in the majority ofcases Internet access is still currently provided only through a dial-upfacility cited on a stand-alone computer.

It is clear that Internet access will become even more important over thenext few years as there is already client pressure to get on line. Currently 73%of the practices already exchange information with their clients, 52% withbarristers, 44% with other solicitors and 19% with their expert witnesses.

Computer technology in this area is progressing at a fast rate. Whilst thecurrent use of internal intranets is still low (11%), a further 24% of practicesare planning to introduce this form of information and knowledge sharing. Itwill be interesting to see how suppliers adapt to this technology in the nextfew years so as to provide external access into systems and build on the abilityto utilise Internet web browsing technology on an internal basis to shareinformation.

Trends for the Future

The 1995 and 1998 surveys have shown how important computers have becomewithin legal practice. The last three years have seen a consolidation ofcomputer usage, but what trends can be identified that will support sensibleinvestment decisions over the next three years ?

  • the more widespread use of case management systems will facilitate the adoption of practice standards
  • increased use of database technology and the holding of more client information will enable the identification of cross-selling opportunities for legal services
  • increasing client pressures to communicate electronically will require the building of gateways that allow limited access into in-house information systems – practices that embrace these systems will gain a competitive advantage in the delivery of client services
  • the use of browsers and web technology will allow the delivery of legal services from any location.

These are future objectives that many practices will choose to embrace, butthey will require careful planning and, in many cases, changes to currentworking practices. It will be interesting to see whether the next survey showsthat these predictions are accurate.