How are law firms using IT to achieve commercial and stategic advantage?

March 1, 2002

PA Consulting Group, the leading international management, systems and technology consulting firm, announced on 20 February the publication of a new survey carried out in conjunction with Legal IT magazine. This survey, conducted amongst both business and IT directors of the Top 100 UK law firms, looks at how IT is being used within law firms today and how well it supports strategic and commercial objectives.

According to PA Consulting, the legal services market today is facing unprecedented change. New entrants are coming into the market offering a wide breadth of services and are stepping up the level of competition for business from ever-more-demanding clients. The survey found that 87% of firms expect to see new competitors entering the legal arena from other professional service firms over the next three years. There is a critical need to react to these market forces to safeguard long-term success. Are law firms exploiting information and knowledge to the full to remain successful in this challenging environment? And are they investing wisely in IT and gaining maximum return on this investment? The key findings of the survey are:

  • The overwhelming majority, 80% of business respondents and 90% of IT, believe that their firm receives good value for money from its IT expenditure. However, the survey shows that this opinion may not be fully supported by fact or measurement, as only just over 50% of firms measure the value or the level of the IT service they receive.
  • There appears to be a mismatch between the strategic direction of IT and the business. The full value of IT is only realised when it supports the overall business objectives and where business and IT leaders have a common view of those objectives. However, the survey found that, whilst 65% of business leaders think that IT receives clear direction from the Executive, only 45% of IT leaders think that this direction is clearly stated.
  • Business vision is not always clearly communicated. Furthermore, whilst 93% of firms believe they have a clear business vision, only 60% believe that this vision has been clearly communicated to staff.
  • There is a lack of cohesive firm-wide processes and technology to support business objectives. Firms consider it is important to work as an integrated and consistent whole and 80% of firms believe they have a ‘global brand’. However, 73% of firms lack firm-wide standard operating procedures and 53% of firms do not have a firm-wide management information system.
  • The measurement of commercial value or other key indicators of business performance is not carried out consistently. All respondent firms are highly client-focused with almost all checking the value delivered to the client, mainly in the form of a client satisfaction survey. However, only 47% measure the delivery of each client matter against quality, time and cost metrics.
  • Staff reward and recognition schemes are not fully aligned with business objectives. There is a general awareness of the need to manage staff well and to attract, retain and reward top quality staff. Most firms are sensitive to personal needs when allocating work and believe that their reward and remuneration system is aligned to strategy. However, only 60% believe staff have personal objectives linked to the success of the firm and only 54% reward all professional staff based on their contribution to profitability.

John Kay, a Member of PA’s Management Group and Head of Professional Services comments: ‘The survey demonstrates that law firms need to make a step change in the way they manage themselves if they are to succeed in an increasingly competitive market. Whilst the objectives of the firm may be clear to its leaders, the implications of these objectives are not widely understood, nor are they translated into the processes and procedures that IT systems can support. Our survey suggests that, whilst IT efforts in firms might be directed for best value, there is much more that could be done to ensure that this is the case. Firms must build systems that allow staff to follow the principles that underlie the objectives of the firm – thus ensuring that staff do the right things in the right way. Finally, information and IT must be managed within a consistent firm-wide knowledge framework.’

The survey was carried out by PA Consulting Group in conjunction with Legal IT magazine and supported by Solicitec. The research was conducted by means of a postal questionnaire that was sent out to the Top 100 law firms in the UK. The findings were also compared to the insights PA has gained on recent work with leading law firms. The survey was targeted at both Managing Partners and IT Directors. To ensure the necessary insights were gained from each target group, two slightly different versions of the survey were used, with certain questions tailored as appropriate. The survey explored how successfully law firms are exploiting IT to deliver value to their business and how well-equipped they are to deal with the unprecedented changes and increased levels of competition that are currently facing them. The response rate is described as encouragingly high, with nearly half of all those mailed participating.

Copies of the report ‘Benchmarking Technology in the global economy – the use of IT in law firms’ are available by
e-mailing mailto:caroline.meares@paconsulting.comor via their Web site (the report itself is not currently published on the Web).