The Technology Roadmap for Legal Industry
Standardization of Legal Software
The legal industry has made a steady progress in standardizing its software. Core components such as financial systems, document management systems and HR systems—which I collectively refer to as “plumbing”—are standardized to a large extent. I consider 2-3 options under each category as standardized since not all companies in any industry will standardize on one of anything. There are companies (and some law firms) who still use LOTUS NOTES for email! As far as practice specific software is concerned, this software has been standardized while the market is not large enough for many providers.
Information security software may be an area where the industry has not standardized, but I am unsure any industry has. Info/Cyber defense software and hardware is a fast-moving industry where products appear, or others evolve, in response to new tactics used by bad actors–a continual game of “Whack a Mole.”
Price vs. Performance
I am sure that cost weighs heavily in the software acquisitions. I have been part of a CIO roundtable and conferences, as well as a very active list serve community where we share our experiences. The firms that I interact with, all AMLAW 100 firms, do use best-of-breed software and understand the value of the product and not just its cost.
Software Maintenance and Upgrades Cost
The ongoing maintenance of software and upgrades is the natural cost of business. Client assessments and audits are driving written and enforced policies on software maintenance. If we do not have policies documented and adhered to, particularly in regards to patching software and hardware, we could jeopardize further business value from that client. Our lawyers are aware of this need, and associated costs, since it is their clients requiring it of us.
The area of greatest and fastest growth among many companies, law firms included, is security software and hardware
The area of greatest and fastest growth among many companies, law firms included, is security software and hardware. It will be the prime expense in our hardware/software category in the next 2 years.
One unique thing about law firms and software is the sheer number of software titles we have. It is not uncommon for a firm like Holland & Knight to have around 3,000 different software titles (products), which is caused by products that specialize in one particular function for certain practices. For example, there are a number of tax products specializing in U.S., cross border, expat, international).
Technology Trends Influencing Legal Industry
Technologies similar to IBM’s Watson are maturing and targeted at the Legal industry. Companies like Kira, RAVN and Ross (who resells IBM Watson) are in the early stages. Some firms have these products in their environment already, but the impact to the business is insignificant. As these products mature and their knowledge base grows, it will put even greater pressure on law firms in the form of the billable hour as well as the drastic reduction of the number of lawyers needed in any law firm.
What Legal Industry Requires in terms of Technology
1) The near term answer is the need for better AFA (Alternate Fee Arrangements) tools that allow firms to budget matters better. There are no products that tie the financial performance of a matter once the work is underway back to a budget. It does not exist and many firms are building their own.
2) The longer term answer is how the AI/Analytics technologies will supplant existing technologies like enterprise search.
Advice to the Technology Decision Makers
My advice would be to focus on the client’s needs and less on the “plumbing”(HR systems, billing systems). Our billing and HR systems do not make us a better service provider. We sell knowledge, so make it easier and cost effective for our clients to leverage our knowledge.
See Also: Top Legal Technology Companies