A Survival Guide for Legal Practice Managers

A Survival Guide for Legal Practice Managers

Digital transformation and the provision of legal services: what legal practice managers need to know and do

Tuesday, July 26, 2016

By Benjamin Balk, General Manager of Product and Marketing, SAI Global 

Digital transformation is changing the way that businesses can operate across a range of industries, and the legal industry is no exception. We would all agree that digital transformation is a current hot topic, both locally and globally, but do you know that digital transformation as a concept is still misunderstood by many?

What exactly is “digital transformation”?

Let us start with a simple question, a definition. What is “digital transformation”? At its most basic level, or at its very core, digital transformation is the use of technology to radically improve the performance of an organisation, and this includes its people.

Businesses, including us in the practice and business of law, often think of digital transformation as a formal effort to revamp our vision, models and investments in order to achieve our organisational goals and objectives, and importantly, stay competitive in the modern digital economy and evolving legal landscape.

Digital transformation in the professional services industry

In the professional services space, digital transformation is very much about realigning technology and business models to more effectively engage with our clients and more efficiently deliver our services to them. As legal practitioners, we would look at every touch point in the client experience lifecycle as well as the matter/transaction lifecycle to identify how we could inject technology to, basically, do things faster and better. Faster means more time efficient, which often translates to more cost effective, and better means (in addition to faster) more accurate by taking less risks and making less mistakes.

The real challenge

But that is easier said than done. The challenge with digital transformation is not about digital. Digital is typically the more logical, technical and easier part of the equation. The challenge is the part that involves transformation. Investment in technology is not a difficult concept to grasp, and many law firms now have one or more resident legal technology experts and a dedicated legal technology budget; but the real test is how exactly can law firms of all shapes and sizes realign business models in practice. You see, this is where digital transformation as a concept is misunderstood; a mere shift in investment in technology is not the same as digital transformation. Don’t fall into the common trap of thinking you are changing, when in reality, you are only investing in technology. The investment, whether in time or money or both, does not equate to digital transformation.

Here is a real life example. After surveying the fee earners to find out what they like, and after much research into the different solutions provided by different vendors, Big Firm Alpha (not its real name!) introduced a state-of-the-art, complete digital document management system. Everyone received training to use this new DMS. Disappointedly, while some fee earners seemed to have adapted well to the new DMS, many continued to complain “why fix something that wasn’t broken”, referring to the old system that had been in use without much incident for years.

This isn’t unfamiliar, is it? We have all heard of or even experienced the less than satisfactory or the rather unsuccessful implementation of practice management software or knowledge management systems. Why did they fall short of expectations?

The answer is this – the implementer of the new technology only advocated changing the process, and did not invest in transitioning the mindsets of people and building a culture that fosters transformation (or more precisely, digital transformation). Change management to take advantage of any technological or business process change is paramount to getting a strong return on investment. Projects should not be about the technical investment only, they should take into account the change management investment required to achieve the returns sought.

The relationship between digital transformation and business processes

We all know that digital transformation has opened up new opportunities for law firms to innovate and streamline business process. Let us break this down a little and work out how exactly this could be done.

A business process essentially is a collection of linked tasks that delivers a service or a product to a user or customer. For example, to deliver our legal services to our clients, the tasks that we have to undertake in the process may include legal research, document production, tracking billable time and record management. A more specific example is the document production process in conveyancing. Imagine this – a technological tool that could, among other things, automatically and accurately generate contracts, transfer forms, mortgage discharge documents, revenue office forms and the letters involved in the settlement process. Wouldn’t that be a dream for a busy conveyancing practice?

If there is nothing to compare to, traditional, manual business processes while it may not be great, they may just be fine (in terms of sufficiency) for a short while. However, when compared to automated processes, it becomes crystal clear that a reliance on manual processes could be costly, in terms of time, human resources and risk.

Risk in business processes

Let us turn our minds to risk for a moment. The relationship between business processes and risks is a tight one. Risk is an unavoidable business phenomenon. Some risks are inherent in business processes, for example, the risk of fraud, and the risk of source data errors. Other examples of risk in business processes include operational risks, technology risk, financial risk, compliance risk, legal risk, information security risk, and health and safety risk. Indeed, business processes of a law firm could be the place where risk materialises.

Let us look at one task in the business process of delivering a legal service we just referred to – legal research. In particular, let us look at conducting searches. From conducting due diligence on transactions of any size, to providing a legal opinion just prior to settlement of a multimillion dollar financing, lawyers need to regularly access commercial information available on the PPS Register, the ASIC registers, AFSA’s records and the various land titles offices’ records. Searches are then carefully reviewed so as to confirm any disclosures made, uncover connections, and expose weaknesses. Proper and swift analysis of the search results informs proper and timely legal, commercial and strategic advice. Don’t forget the contrary is also true – incomplete information gathering leads to deficient analysis, which then leads to poor professional advice. This spells risk in all possible ways. A smaller risk would be the loss of time and money so as to re-do the searches and re-draft the documents. Of bigger consequence is that the firm could be sued, and the firm’s brand and reputation could be on the line. Further, the client would be dissatisfied, and any competitor would be handed an advantage – completely for free!

Digital transformation has offered firms the opportunity to finding new ways to reduce business process risk. By way of example, there is now legal technology that accurately analyses multiple sets of commercial information from public sources and automatically creates one single easy to understand report. Technology such as this, especially if it is one that enables visual mapping of the often complex web of interactions and interconnections, and that can be accessed anywhere due to being cloud-based, are revolutionary – but only if people use it!

Top tip – people is the key

Whether you have long recognised or only just realised that the real challenge in digital transformation is the part that involves transformation, my top tip for the successful use of technology to fundamentally improve the performance of our legal practices is nevertheless relevant – focus on people. This includes everyone, from the managing partner to the graduate lawyer, and do not forget those who are not in the traditional “fee earner” roles, such as knowledge managers, precedents specialists and professional support lawyers.

This is what history has shown – businesses, including law firms, that had focused primarily on technologies without investing in transforming their people’s mindset and actions to ensure their impact do not enjoy the benefits to their fullest extent. This is indeed in line with the observations I have over the years, and no doubt, yours too.

Easy steps that legal practice manages can take

The essence of digital transformation comes down to people. It is how people’s behaviours differ from that of those before them that genuinely matters. To change people’s behaviours for digital transformation success, legal practice managers can focus on communicating these two messages:

  • We are all humans. Humans make mistakes, this is so, even if we are very skilled and experienced in what we are trained to do. Human error is a very real risk. It is a threat with the potential to lead to serious consequences.
  • Process digitisation, such as in the form of automation, enables law firms to deploy people to more strategic and high-value tasks. This means, for example, lawyers are happier as they are doing less repetitive tasks and less paper pushing; they are less likely to be in a position to make mistakes; instead, they can use and develop their talent on “real legal work”. This also means management is happier as the workforce is happier, the firm is more competitive and profitable, and importantly, they are well placed to provide exceptional legal services to clients.

You may not realise it, but just by taking steps to deliver and reinforce these two messages is part of a digital strategy, regardless of whether or not you have one clearly articulated and documented. (If no, you could start now!) As we design or redesign our business processes – this can be from manual to part-automated to fully automated, or from no integration to part-integration to full integration – these messages help create a positive culture that fosters change and to drive digital transformation.

Now that we have a sound understanding of the true meaning of digital transformation, let us work on transforming people’s mindsets and actions, leverage the advanced technological solutions that are now very accessible, and thereby transform our legal practices for the better.

Editor's Note

Interested in learning more facilitating digital transformation at your firm? Benjamin will be presenting on “Balancing the Opportunity and Risks Posed by Digital Transformation to Help Your Firm Better Manage Risk” at 5.20pm on Wednesday 7 September, at the opening of the 2016 ALPMA Summit Trade Exhibition at Etihad Stadium , Melbourne. You can also attend other complimentary Partner Connection sessions to hear the compelling insights from our Principal & Gold Summit Partners. This is a great opportunity to also meet more than 50 market-leading legal industry vendors, conveniently gathered under one roof at the largest legal management trade show in the Southern Hemisphere. The public opening commences at 3.00pm – and you do not have to be registered to attend Summit to come along. If you would like to attend the public opening get a free pass

ALPMA also offers great early bird savings on attending the 2016 ALPMA Summit – but hurry, as these savings end at midnight on Tuesday 2 August. Register now!

About our Guest Blogger

Benjamin Balk

As General Manager, Product and Marketing, Benjamin Balk oversees the product and information solutions strategy for SAI Global Property Solutions, which includes the information product offerings currently being rolled out to conveyancers and solicitors in preparation for electronic settlements. A seasoned executive, Benjamin has held strategy, marketing, sales and product management roles in a number of information services companies including Experian, the Veda Group and CITEC Confirm. These roles have stood him in good stead in his current position, enabling him to contribute his global product management and data experience to the development and improvement of the SAI Global Property Solutions product range. Constantly looking for innovative solutions to solve problems, Benjamin’s mission is to help conveyancers and solicitors and the banking and finance sector to improve industry engagement and efficiency for the benefit of all those involved in Property Transactions.

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