How Law Firms Can Realise the Benefits of Technology Investment

August 31, 2003

To gain the most from their IT, law firms must first understand that achieving both ‘value for money’ and performance improvement involves more than just delivering a new application or system to specification. In fact, law firms need actively to manage the value component of a project to deliver real performance and involve people, process and technology.

With return on investment (ROI) regarded as the key objective for any business project, a firm’s ability to realise the benefits from its information and communications technology (ICT) has become a major issue.

Much of this current drive on benefits stems from a decade of ICT investment in which it has emerged that between 60% and 80% of IT projects have delivered no discernible benefits. Some commentators believe there is little or no correlation between investment in ICT and business success. But with the correct approach to benefits realisation – the process of effectively organising, structuring and managing the potential benefits resulting from ICT – issues of accountability and ROI can be comprehensively addressed.

Despite the excitement surrounding benefits realisation and what it can provide, many law firms do not understand, or properly resource, the benefits process. Many of these problems arise from a gap that exists between partner-level expectations of IT and what the IT function can actually deliver.

Recent research carried out by Boxwood with 20 of the UK’s top law firms found that 50% believe that such a gap exists. The symptoms identified included:

  • exclusion of IT from strategic business decision-making
  • poor communications between partners and IT decision-makers
  • under utilisation of systems capability due to user competence or reluctance to adopt new ways of working.

The research also found that, within those law firms experiencing a gap, the individual shouldering responsibility for delivering IT within the business – whether IT director or partner – is deluged by conflicting priorities on a day-to-day basis.

In this difficult environment, many law firms end up either unaware of the potential risks, containing the risks surrounding ICT investment through outsourcing or simply stopping projects where the ROI does not occur within a very short timeframe.

These approaches fail to recognise the continuing need to exploit technology for competitive advantage and ignore the reasons behind previous failures. It is now time for law firms to get to grips with the real issues underpinning the realisation of benefits from business technology programmes.

The importance of the issue of benefits realisation is further underlined when the challenges currently facing the profession are examined. The most pressing concern is the increasing pressure upon law firms to get closer to their clients. In order to do so, firms must be flexible and respond quickly by making the best use of technology – but that is the essence of the problem.

Benefits Identification

Law firms, in particular, experience a set of problems created by their use of legacy systems, or a departmental approach to systems which creates a menu-driven use of technology. This leads to a situation where the information systems deliver a range of business options for individual lawyers which can either be adopted or not. Of more concern is that these systems are not underpinned by a set of agreed business processes.

A reluctance to abandon existing ways of working in favour of common processes and systems inevitably means the full potential of technology investment fails to be leveraged. To gain the most from their investment in ICT, law firms must first recognise that bottom-line performance improvement involves much more than a project being delivered on time, to specification and to budget. Instead, they need actively to manage the ‘value component’ of a project, and this involves a process quite separate to managing the delivery of the project itself. Moreover, benefits realisation begins ahead of any formal project initiation and often delivers value after the system has gone live.

Most importantly, a benefits realisation process should be owned by the firm and properly committed to. However, it is often at a very early stage that things begin to go wrong. For example, the processes involved in formally discovering the business’s drivers and deciding exactly what needs to happen to respond to the competitive environment are rarely well defined.

Warm and fuzzy ideas around clients or document flow management are seldom turned into a clear view of how business will be done in the future. Without this clarity there is little prospect of developing the sort of well defined objectives that enable the benefits that will need to be delivered to be properly understood.

If you do not have a clear view of the benefits required, there is little prospect of determining the organisational, business process and technical changes that will be needed to deliver them – let alone the business change capability necessary to make things happen.

For benefits to have real meaning they must be expressed as clearly as possible in terms that can be measured. Ideally they should be in the form of hard financial data or some other quantifiable measurement that is tied to the bottom line.

Whilst this may not always be possible at the outset, every effort must be made to do this. Taking the soft option of ‘there will be more accurate data’ or ‘things will be completed more efficiently’ is simply not good enough. It is what the firm does with more accurate data or spare resource capacity that enables there to be real business benefit, and this is what must be quantified and ultimately delivered by department managers.

Benefits Delivery

The next stage is to gain consensus as to where and when within the business the benefit should occur, and therefore who in the firm should be responsible for its delivery. This is vital in ensuring a robust process that delivers results.

To bring key stakeholders on board and overcome the ‘what’s in it for me’ syndrome often requires the formulation of benefits to specific groups or individuals to ensure their buy-in. Every target benefit should be agreed by the managers whose activities are affected and tested against business objectives and previously agreed critical success factors, such as improved efficiencies.

In a similar vein, the potential ‘dis-benefits’ of the system or required organisational changes must be understood. Where these are deemed unacceptable, there may be a need to revise the business objectives or the benefit delivery mechanism. Consensus is vital to success.

The construction and application of a robust benefits realisation process ensures that the prospect of delivering business performance improvement from investment in technology is significantly increased.

However, delivering results in this way demands a whole life cycle approach that is led, owned and managed by the firm. The approach is founded on clear objectives and agreed benefits tied to hard and measurable results.

Where the delivery of results cut across traditional practice boundaries, or where the environment or benefits change overtime, the responsibilities for delivery will need to be carefully managed through a robust steering process.

A law firm’s failure to properly realise the business benefits from ICT investment will undermine the use of winning technologies and ultimately adversely impact upon business performance.

Chris Wakerley, 44, is the former head of communications and information systems (CIS) planning and operations at the UK armed forces’ Permanent Joint Headquarters. He is now a principal consultant at business improvement company Boxwood (