Information technology is now vital to all businesses and law firms have to make sure that they have the right IT strategy. Charles Christian reports on how the IT department is infiltrating the boardroom.
This year The Lawyer's Information Systems conference is celebrating its twelfth anniversary. And as new technologies and information systems play an ever-greater part in shaping our working lives, it has never been more relevant as a forum for exchanging ideas.
Technology is becoming a more important factor in the way successful law firms run and develop. And in the past decade there has been a significant change in the attitudes of law firms towards the way they implement and manage technology.
With the fears over the millennium bug almost entirely faded – though next week's leap year day, 29 February, could still cause some unwelcome surprises – the freeze on new projects that was in evidence during the latter half of 1999 has lifted.
Once again we are seeing a massive surge of interest, among both law firms and in-house legal departments, in technologies that can help take advantage of the opportunities offered by e-business and the online world.
In the past couple of months, Simmons & Simmons has launched its own internet service provider, Elexica; Berwin Leighton has rolled out its web-based delivery mechanism for legal services, Be-Legal; Allen & Overy has announced its Newchange deal room system closely followed by Clifford Chance with FruitNet, and The Virtual Solicitors' Chambers project has won the Society for Computers & Law's prestigious annual award.
And, in FirstLAW, the UK now has its first fully-constituted, Law Society certified and regulated, professional-indemnity insured solicitors' practice to operate exclusively via the internet.
Clearly there are some exciting developments taking place, but the issue concerning most firms is how to make the most of these opportunities.
It is one thing to be an e-business pioneer when you are a City firm with deep pockets, but for smaller firms a move in the wrong direction could spark professional ridicule and commercial disaster.
A recurring theme in legal technology circles, for example, is meeting the demand of larger commercial clients with some form of direct access to a law firm's internal records and know-how.
The technical issue of how to deliver the information is the easiest one to solve thanks to internet, intranet and extranet technologies. The rather more problematic issue for law firms is when they should be providing direct access and what sort of information should be made accessible.
Should a firm start a direct access project now – ahead of demand – to lay the groundwork and reap marketing benefits, or, should it wait until it receives specific requests from clients and then develop direct access services that specifically meet a client's needs?
The risk with the first option is that a firm could spend time and money developing a service that is neither appropriate nor in demand. But the danger with the wait-and-see option is that if the firm cannot provide the access immediately, it will lose the work to a competitor that can.
Once this question has been addressed, a practice must consider where it draws the line when making information accessible.
For instance, clients may want to know how a bill breaks down – but few firms will want to reveal specific time entries and billing postings before it has had the opportunity to polish them up for public scrutiny.
Clients also say they would like access to a firm's know-how. Some firms will choose to charge for the service, as Linklaters does with BlueFlag, while others will offer free information at the risk of giving away the crown jewels of their legal expertise.
An allied problem is the potential volume of data. Yes, search engines can locate information and deliver it to your desktop within a couple of mouse clicks, but the reality could be information overload where a user is swamped with material.
The same type of issues arise when it comes to the development of legal products for the mass market – another project that is high on many law firms' management agendas.
Will a product, for example, satisfy a genuine marketing need, or will it be another solution in search of a problem?
And is it possible to deliver a commodity product while maintaining a firm's reputation for delivering quality services at premium rates?
Given that the evidence to date, drawn primarily from other markets, suggests it is very difficult to marry cut-price products with a quality image, some law firms could soon find themselves having to rethink their approach to e-business.
And what is the purpose behind the project? Is it to make a profit in the longer term or is it to gain some very attractive publicity and promotional benefits in the short term?
Interestingly, lurking in the background of all these debates on direct access, knowledge management and e-business is the more fundamental issue of how law firms should run their IT departments.
The traditional view, dating back to the time when the IT department was merely a back office cost centre consisting of little more than a word processor, was that a strategy regarding technology was determined by the practice management committee and implemented by the department itself.
But today, with new technology increasingly found at the heart of the legal business process, there is a growing body of opinion suggesting that information specialists should not only be involved in the development of a firm's IT strategy but also in the development of a firm's marketing and legal practice.
To the more conservative members of the profession, this may sound not only like heresy but also a bad case of the administrative tail wagging the dog. However, there are a growing number of firms where IT directors sit on the main management board and are consulted on every major commercial decision and tender for new business.
The rationale for the IT experts' involvement in the tender process is that virtually all modern business processes have an IT dimension. A number of firms, for example, have had to abandon merger negotiations because they have discovered that the cost of merging their incompatible IT systems would far outweigh the benefits of the marriage.
It is also essential to have an IT input from the outset when organising communications and the electronic exchange of documents with an overseas client. The alternative is to risk taking on a client only to discover there is a technological hitch that will cost so much to fix that it seriously bites into the profitability of the project, or so much time to implement that the project's deadlines cannot be met.
It may sound revolutionary for lawyers but it is already widespread policy in the commercial world, where IT directors sit on the main board and new product ranges are the result of a three-way collaboration between the professional, the marketer and the technologist.
Successful law firms are heading in the same direction. Today, the key concerns are no longer a matter of which systems you buy or even how you use them, but the way that you manage and run them.
What will differentiate law firms in the future is not the quality of the legal services they can offer – in fact most firms already offer broadly the same quality – but the way in which those services are delivered.
Lawyers may still define those services but it will be the marketing departments which package them and the IT departments which ultimately deliver them.
Lawyers can rest assured that their legal skills will always be needed but when it comes to leveraging that expertise into new and more profitable fields, there must also be a technology dimension at the heart of the legal business.
