ABA Section of Business Law
ABA Section of Business Law
Business Law Today
July/August 1998
Rein in that technology
Getting a handle on the hardware to deliver the goods
By NORMAN K. CLARK
Clark is a principal at Altman Weil Inc. in Newton Square, Penn.
Changes in technology affect the way we practice law
sometimes in ways we didn't expect. Law firms and legal departments can spot potential problems long before they become crises, while building employee and client acceptance of change.
The term technology covers a wide spectrum in today's law office: e-mail, document-management systems; wide-area and local-area networks; online legal research; Internet access and CD-ROM legal references; time-accounting or word-processing software; voice-mail. Each piece of hardware or software has its own distinct characteristics, potential and implications for a law firm or department. Each can affect client-service processes that were relatively insulated only 10 or 15 years ago.
Consider one simple, almost universal example: how word processing software has shifted the roles of lawyers and secretaries in document production. Before lawyers became computer literate, they drafted and secretaries converted the drafts into final document format. They made revisions by physically passing the document back and forth, sometimes many times.
As lawyers started using computers to draft documents and make substantive revisions themselves, the need for traditional secretarial services began to decline. The Altman Weil Survey of Law Firm Economics has tracked the ratio of support staff to lawyers over the last 20 years. In 1977, when magnetic cards and paper tape were the "cutting edge" of electronic word processing, the ratio was 1.21 support staff for every one lawyer. By 1997, the ratio had dropped to 1.04. The most significant factor in the declining support ratio has been the reduced need for secretaries to produce finished documents.
Twenty years ago, the most common staffing issue in many law offices was whether there were enough secretaries to support the paper-intensive work generated by lawyers. Today, the issue is how to make use of the excess work capacity represented by legal secretaries, who spend less time typing drafts and making revisions. Whenever technological change is introduced into a law office, two rules seem to come into force. First, there is always an impact on business and client-service processes. This was true when "new technology" meant electric typewriters, but it is more noticeable and far-reaching today.
How many times have we heard (or said), "I don't know how we ever functioned without [electric typewriters, fax machines, the local area network, the Internet, video conferencing, etc.]." Technology has changed the way the legal work gets done. We used to get along just fine without the technology, because our processes were different. Changing the technology changed the process. It can also change the law office in ways we didn't expect.
Occasionally we are pleasantly surprised by the changes, which can range from reducing expenses for paper to increasing communication and collaboration among lawyers and across practice groups. Sometimes, though, the results can be costly, or even catastrophic. For example:
- Macros won't run on the new word processing software. People have to return to cut-and-paste methods of document drafting while the old macros are being recreated.
- Word processing or database files don't convert completely or require substantial editing after they are converted. Many essential documents have to be recreated or substantially revised.
- The firm grossly underestimates training needs and costs. Staff spends as much as 20 perrcent of their time trying to learn functions and tasks as needed.
- Performance, accuracy, productivity and responsiveness worsen temporarily as people learn how to use new hardware or software. Some people give up and return to the old system.
- Lawyers and staff resist or try to circumvent new security or data management procedures. Clients and lawyers are concerned about security and confidentiality and won't use the new system. As a result, the firm has to keep the old system in operation, as well as the new one.
- The new time-and-billing database "crashes." Bills don't go out on time, creating a cash-flow crisis the next month.
- Frustration grows and morale sinks.
and we may not like what we get.
How can we identify and anticipate the probable effects before they happen? Computer vendors can provide technical understanding and skills, along with the hardware and software; but they are usually unfamiliar with how the legal profession works in general. Moreover, vendors simply do not have the time and opportunity to learn about the subtle and intricate relationships, habits and values that make each law office different. The most effective strategy is for the people within each office to anticipate, plan and manage their own change.
That does not require a crystal ball. Change management starts with a nuts-and-bolts understanding of how legal work gets done. It sets realistic expectations and involves everyone who may be affected by the new technology. Finally, it is a continuing process of anticipating, observing and learning.
Change-management consists of five basic steps:
Step 1: Stabilize the process. You can't solve a problem by dropping a computer on it.
That is why information technology often disappoints lawyers. At best, automating a bad work process just allows the bad process to be done faster, not better. This leads to rework and "workarounds" that can offset any of the hoped-for gains in productivity, efficiency or cost savings. Sometimes, the underlying process may be so inefficient and ineffective that technology makes it even worse.
One of the most common examples of this is the retention of paper-based information systems or tasks that the technology was supposed to eliminate. A new matter is opened. The paralegal or secretary writes the basic information about the matter on a new-matter form (either a paper form or a card). This information is then transcribed into the electronic database. It may also be hand written into a lawyer assignment log. Instead of simplifying and speeding up the process of opening a new matter, the firm has actually made it more complex by adding a step
entry of data into the computer. Instead of making the process more accurate, it has actually increased the probability of error by adding one more opportunity for the information to be miscopied.
The better practice is first to try to improve the underlying, nontechnological processes, then power up the computers. A good starting point is to ask, "How can we improve this without new technology?"
This usually requires no more than drawing a simple flow chart of the process. The worst inefficiencies and waste will usually be obvious. Eliminate steps that add no value to the finished product or service. Look for multiple reviews or inspections. Be alert to steps that merely inform someone else in the organization. Finally, if the flow chart looks confusing on paper, that's a good sign that the process is chaotic in real life.
A job description also can sometimes point the way to major nontechnological improvements. Words like review, inspect, coordinate, copy, revise and inform can raise value-added questions that need to be examined before that task or function becomes part of an automated process. Is the "review-inspect-etc." step required by law? Does it add value to the service to the client? Would the client be willing to pay for it?
This usually doesn't require a full-blown business process reengineering crusade. On the other hand examining and stabilizing processes before applying technology can often produce breakthrough improvements.
At the end of this first step, it sometimes may be possible to forgo or defer costly technological "solutions" to problems that turned out to be caused by an ineffective process. Step 2: Define the goals. Many law offices install new technology without really understanding what it can and cannot do for them. The result, at best, is money spent on software that fails to live up to its promise and that, consequently, almost nobody uses. At worst, the hoped-for benefits are overwhelmed by frustration, disappointment, rework and "workarounds" that can be less efficient and more costly than the old process.
No organization should adopt new technology without first defining and understanding realistic goals and expectations. Moreover, each goal should link specific features of the new or upgraded technology to measurable improvements, such as lower cost, fewer errors or faster processing times. These can usually be translated into monetary savings.
Reducing errors, for example, will free up fee-earner and support staff time that previously had been spent fixing mistakes or redoing work. Some law firms have discovered that, by reducing errors and rework, they can take on as much as 20 percent to 30 percent more fee-earning work with existing staff and resources. Performing more work at no significant additional cost makes the additional work almost pure profit.
The best goals relate specific features of the technology to specific, measurable. For example:
- "The ability of document assembly software to construct routine documents will save approximately 10 percent of lawyer time annually throughout our firm."
- "The indexing and retrieval features of imaging technology will reduce overall document-management costs associated with litigation by 60 percent."
- "The e-mail and file transfer capabilities of a wide-area computer network will reduce mailing and overnight delivery costs by 35 percent."
Stakeholders are any organization's over-the-horizon radar. These are the people who will be most affected by the technological change. They are almost never members of the firm's management committee or senior partnership. Instead, the secretaries and other administrative personnel will usually provide the most valuable insights. They are the people who know the work the best. They are the ones who can make the change work, or undermine it from the start.
Internal stakeholders
lawyers, secretaries and support staff
are easy to identify. Most law firms, however, overlook important external stakeholders, their clients. Some lawyers still dismiss clients as being unqualified to provide any worthwhile suggestions on internal law office management. Law firms who involve their clients in these issues have found otherwise. Corporate clients often have systems and information management capabilities that could be adopted and used profitably by the law firm. Some may even require it of their outside counsel, particularly with respect to document transfer or matter-budgeting functions. Even if clients have no suggestions about specific applications or products, they can often identify ways in which the change in technology might affect them. They are too important a resource to be ignored.
How is each stakeholder, or class of stakeholders, going to be affected? The best way to find out is to ask them. Client and employee surveys and interviews are low-cost, effective ways to collect stakeholder information. If the change will have a significant effect on client services, a focus group of representative clients can often be worth many times the cost of hosting it. Bring the clients in, outline your plans, explain your expectations in terms of improved client service and listen to their reaction. The client focus group will often provide insights that the lawyers might miss. Many clients may have already been through similar experiences.
Stakeholder identification is not just a reconnaissance mission to identify pockets of future resistance. Stakeholders can provide some of the best information about the effect on law office processes. Although most people naturally tend to resist change, stakeholder resistance is usually grounded in apprehension about how the technology might complicate or otherwise adversely affect legal services. Even though some of them may have never expressed it, stakeholders feel ownership of the process. They usually want it to improve, or, at least, not make it worse. Unless they are involved in the changes from the beginning, they may become suspicious.
Internal stakeholders who have been with the organization for many years
lawyers and support staff alike
often seem highly skeptical of any proposed change. Too often this is dismissed as "natural" resistance to change. Rather than being ignored, their concerns should be taken seriously and probed. There will usually be a very practical basis for them. Interviewers need to draw out these process-related issues and help stakeholders articulate them as clearly as possible. These concerns can then be converted into specific change-management issues that need to be monitored.
Stakeholder identification has secondary benefits as well
some of which might be more valuable than the information collected. Holding a client focus group creates a "halo effect" that sets the law firm or legal department apart as innovative and client-centered. Getting stakeholders involved early also starts the "buy-in" process. When the change actually takes place, many stakeholders will see it as "their" idea and will feel committed to its success.
Step 4: Develop change management strategies. Change-management strategies answer two questions: (1) How will we address stakeholder issues and other anticipated impacts and (2) How will we know we are making progress?
The strategies do not have to be elaborate, costly or long-range. Focus on easy-to-implement measures that will get the organization through the first six months. Above all, be sure to address every problem or concern, even if it was raised by or affects only one lone stakeholder. Some parts of a change-management plan might address specific issues or objections, such as:
- How will we ensure confidentiality of lawyer work product with our Intranet system?
- What should we do about the partner who will still insist on drafting all documents on a legal pad?
- Our major client's system will not be compatible with our new one. What format will we use to transfer draft documents to the client?
- Should all lawyers have access to all the reports available on the case-management database?
- Publish the goals that the organization hopes to achieve through technology.
- Let the prospective users attend sales demonstrations and have a voice in product selection.
- Form user-implementation teams to plan how the new technology will be introduced.
- If possible, start formal training before installation. Never wait until after installation.
- Encourage and reward user innovation once the new technology arrives.
- Publish reports measuring progress toward the goals.
Above all, keep talking to the users and clients who are most directly affected by the technological changes. Ask them if they've noticed a difference and if so, whether it was for the better or worse. Encourage them to point out problems as soon as they occur, rather than just dismissing them as "bugs" or "glitches." Clients, particularly, will be impressed by this interest. They seldom experience it from their other professional service providers.
Step 5: Monitor, evaluate and learn. A change-management plan is a guide for monitoring and evaluating the new technology. As a general rule, these issues should be watched closely for at least six months. That will allow enough time for users to become comfortable with the new technology and for stakeholders to become comfortable with the change. If there are major problems, they will almost always show up in the first six months.
Measurement is critical. With a system of simple, practical measurements
such as error rate, document output and processing times
law office managers will be able to tell whether there has been actual improvement, or just a change. Without it, any evaluation of the new technology will be little more than guesswork.
The performance measurements seldom trace a steady, upward improvement. In fact, performance usually worsens immediately after a major change in law office technology, as people learn the new systems. Too often, this short-lived drop in performance persuades managers to abort change and return to the old way. The better practice is to ride out the immediate performance dip and watch for longer-term trends. If things are going to get better, the improvements will start to appear within four to six weeks. If they don't show up by then, managers should reconsider whether the expectations were reasonable and whether they identified all the stakeholder objections and concerns.
Technology is not going to slow down. New capabilities will continue to offer new opportunities to improve performance, client service and profitability in the practice of law. The changes with the greatest potential rewards will often pose the greatest risks. Poorly thought-out innovations will be disappointments at best, usually not recovering the expense, time and effort they require. At worst, they can be disasters, requiring costly rework, write-offs and client-service rescue missions. By following the change-management approach outlined in this article, law office managers can better avoid the risks and achieve the realistic expectations that law office technology presents.
