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IT Partners

The law and the legal profession are moving towards greater systemisation much more rapidly and dramatically, than most realise. Professor Richard Susskind has said that the traditional law firm pyramid “has got to break up” and that law firms essentially have two branches: the specialist division and the process division.

Interesting examples of this change that is afoot, can be found in The UK Financial Times Innovative Lawyers 2012 Report [1]. It highlights the fact that non-traditional approaches to providing legal services are gaining momentum.

Having innovative clients would have helped those interesting projects get off the ground. Similiarly, it would have been an advantage for the firms if their own service providers were supportive of these new ideas, and prepared to implement them quickly.

Choosing software for your firm is not just about your practice type, it might also be necessary to decide if you are either an innovative, or more a conservative firm.

Clayton Christensen’s classic book, The Innovator’s Dilemma highlights the fact that established businesses tend to resist disruptive change as they have too much invested in the status quo. It is interesting that two established Practice Management Systems (PMS) developers have not yet released cloud versions though these should not be far away.

The developers of Australian-based Leap, and Canadian-based Amicus Attorney also have a few other things in common:

Being well established, they are both focussed on the desktop and the work-style of more established law firms. In the same way that laser printers were initially superior to inkjet printers, their desktop applications are “better”, for now. The gap between the cloud and the desktop is closing, and might become irrelevant in the eyes of customers if the importance of “convenience” remains underestimated. The iPhone camera is not the best camera, it is used because it is the most convenient camera, and is part of the “Apple experience” which goes way beyond the device.

Leap and Amicus users’ experience with desktop applications has not been up to Apple’s high standards, in part because client demands lead to feature bloat, and the challenge of everything linked, on everything. That is a lot of vulnerable moving parts, especially with some from a different vendor.

Hence their reluctance to tinker with functionality that took considerable resources to develop and test with other systems. Longstanding developers of desktop applications typically have procedures in place that might make them a questionable choice for firms that need to be nimble innovators.

For example, both have traditional “business hours” Help Desk, which might not help the “New Normal” lawyer who could be working any time and any place in the world. This applies particularly to younger lawyers who don’t seem to understand “business hours” as they work around the clock.

Further, programs with a huge number of users don’t rapidly develop and roll out new features. For a start, they probably want a large number of existing users requesting a feature before it is taken seriously. There is also the possibility that they will try to keep their desktop applications in sync with the cloud offering.

Christensen has plenty of examples of how industry leaders get blindsided by disruptive innovations precisely because they focus too closely on their most profitable customers and businesses. Large established PMS suppliers are unlikely to introduce a ground-breaking approach to legal practice which will cannibalise their current cash-cows.

Nevertheless, I know of a number of firms who are totally opposed to cloud-based Practice Management Systems because the product developer has much greater control over the customers’ use of the program on a daily basis. For a start, you no longer control access to the server; they do.

To date, concern about cloud-based systems such as Dropbox have centred on stopping the supplier’s staff, or foreign agencies, from having access to your data. However, the converse of that is that you can be stopped from having access to your data.

So if you had a cash-flow issue, an inflexible accounts department might restrict access to your system should you not pay on time.

Experienced cloud-base PMS providers allow users to have a local backup feature, and keep a local copy. It means that you will only be inconvenienced, rather than totally cut off should you and your provider have a technical, or financial issue.

With quite a few privacy, security and consequential ethical issues before them, it is not surprising that the more conservative members of the legal profession will not be rushing to the cloud.

However, with an ever-growing variety of models for the delivery of legal services emerging, it will be interesting to see how the “old guard” software publishers go with their cloud offerings. They do seem to be playing a safe hand by simply adding a cloud alternative to their desktop and “freemium” models. No doubt, they would like their current lucrative business to not change.

It will be interesting to see if they go for a pure cloud approach or have a hybrid desktop/cloud system which was the approach taken by accounting package MYOB. That approach is not the pure cloud approach of its upstart competitor, Xero.

The catch with trying to appeal to your existing clients is that the traditional business of law itself is not as lucrative as it was. Low overhead lawyers and legal service providers are eroding the law firm pyramid. Cloud solutions have reduced the barriers to entry for entrepreneurial competitors who use terms such as “business”, “pricing”, “project management” and “process management”.

Legal IT consultant Seth Rowland highlighted a challenge in a recent review of cloud-based ActionStep in the Technolawyer SmallLaw [3] newsletter of October 12, 2012.

The ideal users of ActionStep view their law firm as a business with one or more specialties. To grow this business, the firm creates model documents, trains its staff in specific procedures, and markets its services to increase volume. … ActionStep is not for every law firm. ActionStep is for lawyers who “get document assembly” and understand business process management. It is not a program for generalist lawyers who take every case that walks in the door.

Therein lies the problem: the future might not be so bright for conservative, particularly generalist lawyers and their PMS suppliers. So even if the traditional law firm pyramid doesn’t actually get broken up as Susskind advocates, digital termites will continue to erode the revenue of “old law” practices, and with it, the revenue of their suppliers. With technology playing such an important role in the success of new legal businesses, picking the right IT partners is crucial.