For the better part of a couple decades, Matt Thompson has worked with large law firms to implement sizable technology projects in support of smarter business development – and has a wealth of tech experience beyond it.
Today his role centers on leading a Client Success Team Program and we managed to get a hold of him in-between client conference calls to get his take on big law and technology. He walked us through a perspective, highly influenced by his experience with large law clients, which touched on several IT trends including, big data, cloud, eDiscovery and security.
1. What are the top challenges large law firms face today, in terms of data and technology?
MT: Economic pressures are causing law firms to re-evaluate technology strategies. The market broadly accepts that technology can provide competitive advantages, but those IT projects need to be better aligned with overall law firm business objectives. Too often technology initiatives get mired in efforts to move bytes from one machine to another, rather than marrying the right information in order to make better decisions.
Firms can fall into the trap of taking on large technology projects that are not tightly aligned with the firm’s larger business imperatives. For example, firms might build complex integrations between systems just because the systems contain related sets of data. Without a plan for how the integrated data would be consumed and maintained, however, the project can bog down under its own weight rather than deliver strategic value.
A better approach is to let the business strategy be the catalyst and engine for driving the project. For example, a law firm might have a business strategy to grow a specific practice area by 20%. To support this growth goal, the firm may create a business development strategy centered on cross-selling to “good” clients who underutilize the practice area. A technology plan can then be executed to support this strategy. The firm might marry together data from their financial system with their CRM system to assess and size the market opportunity, identify the best target clients, and report on the success of the initiative.
2. What trends are you seeing in their adoption of practice management solutions? What has changed or is changing vs. a year or two ago, and why is this happening? How is LexisNexis enabling clients to address these changes?
MT: The most significant technology adoption trend we see is that law firms are discovering the way they deploy technology solutions can provide a competitive advantage. There are a number of well documented large law case studies where firms have simplified complex data and shared it across the firm, invested in R&D, and project to work more collaboratively or efficiently on cases.
There are other examples that nest neatly with a given law firm’s strategic priorities: eDiscovery projects are aligned with efficiency given the proliferation of data means it’s becoming nearly impossible (or very expensive) to have an attorney review every document. Mobility and cloud solutions are focused on productivity, collaboration and overall lower IT costs. CRM is increasingly focused on analysis that leads to more strategic business development activates – by identifying how those activities influence the deal cycle.
What’s also happened is technology has provided additional options – a law firm could choose build the IT expertise itself, or it may opt to find a trusted partner. Both options come with opportunity costs and count benefits and drawbacks.
3. Do most large firms rely primarily on internal IT staffs or do they work through partners — solution providers, MSPs, or developers’ consulting groups? Why is that, do you think?
MT: We’ve observed wide variation that is dependent on the specific needs of unique law firms. Broadly speaking, the overarching decision point is whether the firm chooses to build technology expertise within the firm or outsource the function.
Building expertise in-house can provide greater control and competitive advantages, but also comes with the risk of diluting core competencies in the practice of law. Outsourcing, whether hosting or hiring consulting groups, to manage most IT work ought to free the firm from technology distractions and focus on law, but it also comes with a sense of dependency.
There are varying degrees of these choices too. For example, some firms have developed technology expertise, but re-located those functions to lower cost regions of the country. Others use solution providers for specific tasks – such as eDiscovery – while keeping critical systems from financial management to CRM within the firewall of the law firm.
The decision point centers on identifying a law firm’s core competencies and where the firm wants to invest finite resources for the best possible outcome.
4. How have cloud and big data changed practice management? How would you describe adoption of these technologies at large law firms?
MT: Cloud adoption has largely taken off as the conversation has shifted from asking – is the cloud secure – to how do we make it more secure? There is a realization across the market that in some way, shape or form, (even from a consumer, rather than enterprise perspective) the majority of legal professionals already use the cloud.
As a result, cloud adoption has perhaps taken hold at a rate faster than the legal market might have anticipated. The tipping point was the observation that the model is less complicated from a user standpoint. The consumerization of technology – that for the average citizen technology has become so simple and useful – has significantly raised expectations of technology in business.
Indeed, some of the newest technology tools are only available in the cloud and while there aren’t currently many viable options for large law IT systems in the cloud today, we expect that will fundamentally change in the next few years.
In many ways, the trend toward the cloud is related to big data given its proliferation. Certainly big data is a buzzword with resounding echoes in most corners of the legal profession, but from our perspective the shift in thinking about data is a bit more basic: law firms are becoming more sophisticated at using the data they have to make business decisions rather than relying on a gut feeling.
We see this idea manifested in more sophisticated knowledge management programs, law firm marketing systems and financial management. It is all increasingly being aligned with law firm business priorities, which are increasingly focused on those practice areas that present the most opportunity and highest profitability.
5. How big of a concern is security at your large firm clients? How do they typically address cybersecurity?
MT: Security is an enormous concern – an agenda item on virtually every conversation about technology. Targeted cybercrime is a hot topic at industry conferences and just recently, a law firm fell victim to a ransomware attack.
The idea that law firms are the “soft underbelly of corporate America” is a driving factor. In fact, several leading industry thinkers have predicted IT security issues this year.
For example, Lee Rosen, an attorney that runs a virtual law firm said, “A prominent law firm will experience an embarrassing, expensive and damaging data security breach. Client data will be circulated, litigation will result and the reputation of the firm will be irreparably harmed when their lack of protection becomes apparent.”
Security changes constantly – truly a game of cat and mouse – and technology that was considered secure six months ago may prove vulnerable today. It’s because these threats continuously evolve that the task is endless – you can’t read a book and know everything you need to know about security.
It is also a key consideration for a law firm considering building expertise in-house – and it centers on core competencies. Is a law firm better off investing in the tools and expertise – or finding a trusted partner that specializes in technology and that understands the specific (or ethical) requirements of the legal community?
6. Anything you’d like to add?
There’s an enormous pivot happening right now in how law firms are developing growth strategies. The shift is moving law firms from broad and perhaps ethereal marketing goals, to one that’s fine-tuned for business development. This has largely been driven by economic pressures and the realization that relying on a handful of rainmakers isn’t sufficient or sustainable in the long term.
Increasingly law firms are recognizing everyone in a law firm has responsibility, whether large or small, to contribute to new business development. The result has been firms that become increasingly client centric and recognition that it’s important to understand not just a client’s legal challenges, but their entire business.
Law firms are rolling out a wide variety of programs aimed at solving this business challenge in the era of the “new normal.” The options range from sales training to information systems that enable anyone in the firm to understand what is going on with their clients. It’s leading to better service and clear winners are emerging.
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Matt Thompson is the director of the Client Success Team Program for the LexisNexis InterAction business.
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