Using technology to drive profitability in the modern law firm

18
Jul
2016

James Quinn

Having spent the first part of my career as a corporate solicitor in the magic-circle, I could see first-hand significant inefficiencies within legal practice and the opportunity for technology automation to change the legal landscape forever. It is for this reason that I co‑founded Clarilis with a view to developing and implementing its unique precedent automation platform that is proven to improve the profitability and efficiency of law firms. 

It is hard to deny that technology is the future of business, but nowhere is that more relevant than the modern law firm. To remain competitive, firms had previously focused almost exclusively on outward performance to drive profitability and increase revenues. But more recently, with the increasing importance of technology automation, firms have been looking inward and are now better able to identify the internal processes that are cutting into their PEP. 

Any form of critical introspection is difficult so Clarilis makes that first step for law firms straightforward. I know first-hand the importance of focussing on hard results to overcome the initial scepticism my colleagues in the legal industry had about automation and am now in a position to help them make those results a reality. Given the boom in the legal technology market, it is important to ensure the investment in IT is both targeted and strategic.

One of the biggest fears of any purchaser of any product or service, is whether the product or service does what it was purchased to do. It’s fair to say that in this vein, automation has had something of a poor reputation. There are a large number of good firms who have wasted a lot of time and expense on automation projects that have not come to fruition. Many firms are put off by the business model of traditional software toolkit suppliers, whereby they sell you the software but you have to build the processes, invest the internal resource and take all the implementation risks. 

Experience tells us that the overwhelming reason that so many automation projects fail, is that firms are significantly underestimating the resources required. These failed projects could explain why a third of lawyers we surveyed for our report, Technology-driven profitability in the modern law firm, still remain sceptical to some extent about the benefits of precedent automation. 

The report highlights that the most popular reasons for scepticism are concerns about the quality and accuracy of automated drafting (46%), closely followed by a belief that the implementation costs would be prohibitive (36%). These are understandable but surmountable concerns. 

In an era of bringing value to clients cost effectively, the traditional drafting process seems archaic. And it is. It might be surprising for clients to know that substantial time is incurred in entirely routine tailoring of standard precedents rather than valued-added services such as negotiation and “face time”. 

In terms of automation, what works best is a customisable questionnaire that is integrated into a firm's precedent suite such that, in answering structural questions (parties, type of lease, etc.), the precedent will automatically be updated throughout. This is in addition to  grammatical changes that need to be made to reflect, among other things, pluralisation that can drive hundreds of minor amendments to a given document suite. 

Results have shown that a well implemented automated approach to precedents can save an average of 54 minutes of every hour in the mundane aspects of drafting. That’s 54 minutes that can be better spent on truly value-added work that your clients come to your firm for. 

Given the advantages, it's surprising to find that less than 1 in 5 of law firms are currently using a fully automated drafting process. By facilitating the delivery of better service at a lower cost, automation has been providing senior fee earners the freedom to maximise their time elsewhere and opening a window of opportunity for junior, lower cost fee earners to provide additional value. 

There are also a number of indirect benefits such as greater firm-wide consistency in drafting, better risk management, governance, built-in quality control and the rigid implementation of house style. These advantages also play a huge role contributing to the more intangible benefits, such as brand reputation and client satisfaction. 

In my experience, automation projects can be complex and require careful planning and resourcing in order to be successful. I thought it might be useful to share some of my own pointers on how to get started: 

1. Ensure at least one sponsor at partner level has a vested interest in the success of the project, so that they can help to create and maintain the necessary internal focus.
2. Only use qualified solicitors who are subject matter experts and that have a deep understanding of document automation to automate your precedents.
3. Focus on solutions that are user friendly, as fee‑earners are highly unlikely to embrace cumbersome technology or to endure extensive training sessions.
4. Consider managed automation solutions designed by people who understand the legal framework and technological nuances of automation.
5. Analyse where true benefit to both your business and fee earners can be achieved through precedent automation.
6. Take a comprehensive look at the total cost of ownership for the project and have a clear understanding from a risk perspective of whether the project will actually achieve its goals for the business. 

A move to precedent automation can represent uncharted territory for many. I have personally witnessed how those firms that have embraced automation with the right implementation strategy and technology, enjoy the tremendous benefits that have resulted from a new competitive advantage and better cost recovery, over the firms that maintain the traditional manual approach to drafting.