How is law firm IT spending shaping up so far in 2014? The new 2014 ILTA/InsideLegal Technology Purchasing Survey provides a useful benchmark.
The 9th annual survey, conducted jointly by InsideLegal and ILTA, earned a 20% response rate from member law firms. A 31-question survey was distributed to 1,407 members and earned 281 responses. The vast majority (86%) of respondents were based in the U.S. The report provides a useful executive summary and here are six data points that jumped out for us:
1. More law firms warming up tech budgets.
While law firm IT budgets did not appear to rise, more law firms seem to be adjusting their tech spending upwards in order to be on par with peers: 72% of law firms with 50 or more attorneys plan to spend between 2% and 4% of revenue on IT – up from 63% in 2012. The survey authors write that spending between 2% and 4% of revenue on IT is the “new IT budget normal” for firms with 50 or more attorneys.
2. Law firms upgrading hardware.
The survey found that the top five tech purchases law firms have made in 2014 center on hardware upgrades. The buying patterns seem logical given IT experts recommend upgrading physical servers every 3-5 years.
a) Laptops/notebooks (up 15%)
b) Desktops/PCs (up 5%)
c) Network upgrades/servers (up 6%)
d) Printers/multifunctional devices (up17%)
e) Antivirus/anti-spam/spyware software or services (up 19%)
3. The legal IT buyer’s source of influence.
The survey identified the top three sources that influence buyers as a) internet research b) peers and law firm recommendations c) consultant recommendations. The report says:
“According to the 2014 survey results, the number one reason law firms hire outside consultants is to assist with implementations, followed by assistance with hardware and software selection.”
The survey also looked at the impact industry analysts have on legal IT buying decisions and found 76% of respondents have not worked with industry analysts, though Gartner and Forrester were the most cited analyst firms.
Though the report did not make mention of them, other market research firms with analysts dedicated to legal technology include Blue Hill Research, Outsell and Hyperion. Some of these firms provide free resources in email newsletters or blogs that law firm technology professionals will find helpful. An example Gartner report – aimed at corporate counsel – can be found here: Magic Quadrant for Enterprise Legal Management.
4. Shift in mobile device preferences.
Interestingly, the survey found shifting preferences in preferred mobile devices among law firms:
“In 2012, we added a question about what specific mobile devices ILTA members are purchasing for their firm and were surprised that 49% of respondents still purchased BlackBerry devices. This year, 28% indicated purchasing BlackBerry phones while 63% are purchasing iPhones, down 9% from 2013. When surveying tablet purchases, 44% chose Apple iPads (down 15% from 2013) followed by Microsoft Surface (17%, up 7%) and Android devices (10%, down 3%). 65% indicated they have a formal mobile device security policy in place, up 30% from 2013.”
“Ultimately, if firms continue to purchase mobile devices more of them will gravitate to Windows tablets, similar to the way most companies supply Windows desktops. While Android and iOS won’t die, there is an ever-increasing push towards devices that seamlessly integrate between systems.”
5. Big data enters the law firm lexicon.
For the first time, the survey included questions about “big data.” A snap poll conducted during a “big data” session during the ILTA conference demonstrated wide disparity in defining big data and that sentiment seems to be reflected in this year’s ILTA/InsideLegal survey:
“While 62% of all respondents don’t have a big data plan in place, 10% are working on formalizing their big data strategy and 6% already have a big data plan in place. When asked how they would use or leverage big data technologies, more than half of the respondents indicated using business intelligence/analytics; 39% would engage in data mining; and 31% cited managing legal spend and leveraging predictive coding technology.”
6. Top law firm IT challenges.
Email management took the top honors for the most vexing IT challenges facing law firms. It’s not surprising since a number of casual conversations we engaged in-between ILTA sessions aired grievances over the volume of email piling up while attendees spent a week at the conference. Cloud security, risk management and compliance followed in 2nd, 3rd and 4th place respectively.
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What takeaways from the survey results would you add?
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