Online and on course for more business
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10 March 2014
Size has become a big issue in the law. Being bigger is a fine obsession. We would all love a larger slice of the big five law firms' client base. But it is not a life or death matter.
No law firm is going to close down because it does not have the right number of partners on its letterhead. Nor will any go under because they are in the wrong position in the rankings by billings.
But they will go under, or be forced into a loveless and unequal merger, if they fail to be efficient. This is particularly true of the most competitive areas of the legal market - the medium-sized commercial firms and the small legal aid practices.
Productivity is, of course, the key to increased efficiency: how can one increase billings per fee earner or profit per fee earner to the extent that one has a clear advantage over the competition?
The straightforward but often elusive solution is to reduce overheads, increase billable time and to ensure that billable time is spent effectively. The standard solution is to streamline deployment of information within the firm, through the use of case management systems, intelligent forms and precedents, information retrieval systems and other software applications.
For many years the cost of introducing the most efficient information deployment systems has been so high that only the most successful firms have been able to make the investment. It has created a virtuous circle of increasing competitive advantage.
Curiously, however, advances in technology now threaten to reverse this process. Take the example of intranets versus local area networks. Intranets apply the principles of Internet communication to in-house networks, enabling users to deploy information held anywhere on the system anywhere they wish.
Much of the software required to operate them can be downloaded for free from the Internet, and the hardware requirements are much lower and cheaper to set up than traditional network systems: suddenly efficient information systems are no longer the preserve of the rich.
But the democratisation process does not stop there. Intranets make it possible for law firms to deploy what Richard Susskind calls their "institutional memory" more effectively, but the Internet has the potential to create an information resource richer than anything an individual firm can build up on its own.
So far legal resources on the Internet are virtually non-existent. But that is changing. Gradually the legal publishers, the major law firms, the government bodies and the professional associations are moving towards the Internet, either as a means of selling information, or as a means of marketing to potential clients through the provision of free information.
Of course everything is in chaos at the moment, but there are companies entering the arena which specialise in bringing together resources in niche areas, indexing them and making them directly accessible from a single search engine.
One such organisation is the Current Science Group, which has created an online community of nearly 50,000 bio-medicine researchers through a Web club called BioMedNet.
The same group is launching LawCity for the UK legal community in the New Year, with a view to creating an environment tailored to the needs of the legal community, pulling together the resources from information providers from across the Web.
And it is not just a matter of putting a powerful information resource on the desk of every two-bit lawyer in the country, it is also about pulling together a community of people, who can operate almost as a virtual firm. Suddenly IT, once the creator of comparative advantage, has become the great leveller.
Relying on machines alone to make us more efficient is not the answer. It is essential to focus on the people and on the way those people deliver the legal service. Denton Hall has appointed a director of professional excellence whose role is to ensure that we learn to do things better. This should help us compete with the Big Five, at least in terms of profile, if not in billing.