The legal technology skills audit is coming. It is simply a question of when.
D. Casey Flaherty, corporate counsel at Kia Motors America, Inc., gave a talk at Legal Tech West last year, and revealed that most outside counsel have no idea how to produce a document. Also at Legal Tech last year Connie Brenton, Chief Legal Officer at NetApp and President of the Corporate Legal Operations Consortium (CLOC,) a professional organization made up of Chief Legal Officers from Fortune 500 companies, rocked the auditorium when she announced that the billable hour is dead.
The legal technology skills audit is not an inventory of what technology you are using, but a test of how well you use it to complete legal tasks. This kind of audit is becoming key as more lawyers move away from the billable hour to flat fees.
How did we get here? Before 2007, law firms regularly upgraded their technology every four or five years. In 2007, most firms ran Office 2003 on Windows XP when Microsoft launched Office 2007 on Vista. In 2007, the music stopped, and the legal industry consolidated.
Law firms didn’t start investing in technology again until 2010, when Microsoft launched Office 2010 and Windows 7. But when firms upgraded, productivity slumped, and stayed slumped. According to a NeoChange 2012 Adoption Insight Report, effective adoption rates have dipped and stalled at 52%. That means that half the lawyers in a law firm are not using the new tools. The NeoChange report calculates that law firms suffer persistent productivity losses averaging 17%. That means that lawyers are taking Fridays off.
Productivity losses translate into lower profits for law firms. Firms bill their clients for time spent. Under alternative fee arrangements, however, clients don’t pay for the amount of time attorneys spend to produce documents; but rather for the documents themselves. This means that efficiency can increase a law firm’s profit margin: the less time attorneys spend to produce documents, the more they get paid for their time.
Law firms can achieve efficiency through the use of technology, and either you need to perform a technology skills audit, or someone wanting to hire you will. To prepare, here are some do’s and dont’s for a technology skills audit:
1. Research. Research. Research.
Do your research. Find out what processes are critical to business goals and invest in technology that can add value for the client.
Don’t create technology budgets in a vacuum.
Example: Ask fee earners, rain makers, heavy hitters and others what should be in IT’s budget next year. Uncover bottlenecks in the business process and spend to fix them.
2. High Adoption Rate.
Do spend on technology that has high adoption rates, including the next shiny, new thing if people are using it.
Don’t spend on the next shiny, new thing just because.
Example: At our firm, about one-third of attorneys use an iPad. We will roll out Office for Mobile on the iPad by mid 3Q14. Customize technology to best serve the business goals of the people who use it most.
3. Improves Client Value.
Do spend on technology that improves value for the client.
Don’t spend on technology that doesn’t improve value for the client.
Example: Knowledge Management (KM) thinks it’s a good idea for attorneys to organize files by client-matter number. The document management system (DMS) does that in the “Save” profile; however, KM asks IT to upgrade the DMS to accommodate folders that do the same thing. Client value here? (Enough acronyms here?)
4. Training Based on Feedback.
Do focus training content on feedback from super-users.
Don’t focus training content on what squeaky wheels call the Help Desk.
Example: Looking for training content in Help Desk tickets is like cross-examining the other side’s expert witness: The information you uncover is likely to insult your best witnesses. Don’t train people on features they don’t want to keep in their heads; that’s why they call the Help Desk in the first place. Train processes that your best people do well in the context of their business.
5. Do the work.
Do train people who do the work.
Don’t train people who don’t do the work, or who you think should do the work.
Example: Stop training legal assistants (aka secretaries). They are no longer producing documents. Associates are producing documents…and not very efficiently. Train/certify associates on tech skills. Efficiency provides more value for the client; and more money for the firm.
Something to think about. Scientists say that we use only a small part of our brain’s potential to think. It comes as no surprise that we use only a small part of the technology we have available to do our daily work. A technology skills audit reveals how small (or large) a part.
“Thus conscience does make cowards of us all…” and lest we “…lose the name of action” (Hamlet, Act 3, Sc. 1) let’s do something about it. A technology skills audit will show us what to do, focus IT training and spending on higher adoption rates. What better way to increase profitability? A technology skills audit makes money for the firm. Simple as that.
So, impending technology skills audit? Bring it on.