19 May 2011

ABSs will have advantage with fresh approach to use of IT, warns Christian

New entrants to the legal services market after October could have a significant advantage because they arrive with a fresh approach to IT, according to a leading commentator.

Charles Christian, a former barrister and editor of Legal Technology Insider, told a conference that IT is at a “tipping point” where technology currently used by law firms is about to be superceded. Firms need to face up to embracing a new way of doing things, he urged.

He also warned that firms should use social media to communicate with clients who want it but be mindful they would sooner or later be swept away by different forms of media. “The trick is not to get too excited about it – it’s just another communications medium,” he told Netlaw Media’s Key strategies for law firms 2011 conference in London.

Many law firms have concentrated on replacing back-office accounting systems, which often add little to profitability, said Mr Christian. Technology such as document management software was still “unknown in many firms”, whereas others have realised its potential and are “making shed-loads of money” with it, he argued.

Alternative business structures setting up from scratch can look at IT afresh without the “legacy of the past”, he pointed out. To compete, existing firms should engage in “blue-sky thinking” and consider the question, “do we tweak what we have or reinvent ourselves?”, he suggested.

He listed technological options now available to law firms, such as cloud computing, where data is stored off-site and accessed via the Internet. Also, outsourcing IT and using “software as a service” – in which software is web-based and paid for only when used rather than installed permanently on a firm’s computers – were now viable alternatives, he added.

He highlighted Clifford Chance’s ongoing project to move to an infrastructure-free environment by 2015. The firm’s chief information officer, Paul Greenwood, recently told a computing website that it is planning to shift much of its data into cloud computing, with only highly confidential data remaining in-house.

Mr Christian said a challenge for law firms was for managers to “grasp change” and adapt to the “different cultural mindset” in relation to technology of younger lawyers and younger clients.

An example of the “generational change” in attitudes to legal IT, he said, was MyCase, a product shown at the LegalTech IT show in New York earlier this year. A law firm management product based on familiar social media websites, MyCase claims to be “combining the best of social networking with legal practice management”.

He concluded by saying that firms should not view technology as a substitute for a fundamental business strategy or a clear view of where they are going. Spending money on IT will not help a badly-organised firm to perform better, he said. “You’ll just have a computerised badly-organised firm.”

Tags: ABS, Alternative business structures, Technology