Big Law is so behind the legal IT curve
When I did my legal IT predictions for 2014 I hadn’t read the latest editions of Legal IT Today (Issue #4) or the Briefing from the Legal Support Network on Legal Technology in 2014. If I had I may have been a little more conservative about what the future holds especially in so far as it relates to Big Law.
When I am referring to Big Law here I am probably doing so in the traditional sense of the larger law firms rather than the BigLaw business model referred to by George Beaton in NewLaw New Rules. That business model can include smaller law firms who operate along traditional law firm lines. Not all of those are as behind as Big Law is when it comes to legal IT, although many certainly still will be.
Legal IT Today and Legal Technology in 2014 Briefing are probably more aimed at Big Law and have, on the whole, contributions from and about Big Law. The picture both paint of the future of legal IT is one that I recognise from several years ago. But then I come from Small Law or perhaps NewLaw.
I hadn’t quite realised how far behind the legal IT curve Big Law is.
Apparently cloud is “probably the future for legal”. Probably! It is undoubtedly. But it is clear that Big Law is way behind Small Law / NewLaw on that front. I was writing on this blog about my law firm’s move to the cloud in 2011.
There is an acknowledgement that the cloud makes NewLaw “as agile, if not more agile, than Big Law”. I think much more agile.
However, there is a report on a NewLaw firm that set up as recently as 2011 but decided to “stay on the ground and invest in [their] own heavy duty servers” because the document management system they set their sights on could only unleash its full power if it was installed on the firm’s own hardware. I think I would have moved my sights elsewhere fairly quickly!
An article on the cloud tells us that lawyers will be able to work using any connected device. Will! They can. I do.
These articles come from interviews with Chief Information Officers or IT Partners at Big Law. All who are in law firms that are clearly several years behind when it comes to cloud technology.
It is, however, recognised that the problem is that Big Law has invested heavily in non-cloud based technology and needs to “sweat their expensive IT investments” before they can justify a move to the cloud.
So I clearly need to revisit my 2014 predictions on the cloud as I now think Big Law will be speaking about it for years to come and it will not become as ubiquitous as quickly as I predicted.
Apparently Eversheds now have 500 iPads in circulation and it is therefore assumed by the Legal Support Network that the idea has worked. I, on the other hand, would imagine that for most of the 500 users their iPads are nothing more than a plaything perk rather than workhorses bringing real benefit to the law firm. This will be especially true if you are not fully in the cloud where tablet access would at least be somewhat beneficial. It would be interesting to see facts and figures on the actual Return on Investment.
When the iPad first came out Lev Grossman wrote in Time:-
While it’s a lovely device for consuming content, it doesn’t do much to facilitate its creation. The iPad shifts the emphasis from creating content to merely absorbing and manipulating it. It mutes you, turns you back into a passive consumer of other people’s masterpieces.
Walter Isaacson in his biography of Steve Jobs commented on this:-
It was a criticism Jobs took to heart. He set about making sure that the next version of the iPad would emphasize ways to facilitate artistic creation by the user.
I don’t think Steve Jobs had lawyers in mind when he did so 😉
However, many tablets have evolved into mini-laptops (at least those that have their own keyboards) and might now be a more all rounded device for a lawyer to whom screen size is not essential whilst working.
It would appear that at least one Big Law firm is “looking at Windows 8.1, the Surface and Windows phone”. No need to waste time looking – get on and buy! It is beyond me why any law firm would not be buying Microsoft when it is already so ingrained within the legal profession and actually works well for it. Seduction and perceived prestige over function and practicalities leads to a law firm biting at Apple.
Another area where Big Law is clearly way behind the curve is social media:-
Social media has been on our radar for a while.
That while must be about five years or so!
It is perhaps apt when looking at law firms to quote William Gibson:-
The future is already here — it’s just not very evenly distributed.
Image credit: Diagram (adapted by The Time Blawg for this post with the addition of law firm references) by Craig Chelius (private communication with Craig Chelius) [CC-BY-3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons: http://commons.wikimedia.org/wiki/File:Technology-Adoption-Lifecycle.png
And you thought fear, ignorance and arrogance was the sole preserve of lawyers? Nope. Good post Brian.
Sorry, Brian, but I have to completely disagree with regard to your comments about “the cloud.” There is nothing magical about “the cloud” that enables anything better than what can exist on premises. In fact, I would argue that, from research I have conducted, firms that rely solely on hosted services (i.e. “the cloud”) tend to be spending more, overall, on IT, than those that properly manage their own systems (with, of course, still a fair number of hosted offerings in the mix).
I recently assisted a friend’s firm in replacing their entire infrastructure and they chose largely an on premises offering (with a couple of hosted offerings such as an email filtering/archiving solution) and the cost differential was quite huge – a savings of 30% over a five year period. That 30% can now be reinvested in adding efficiency elsewhere.
I agree that many BigLaw firms are behind the curve by comparison to others, but that has nothing to do with a need for sweating assets. I would suggest that it is more to do with culture of those firms. Management structures that include no experienced business people at the executive level (i.e. boards comprised of only lawyers and perhaps a finance person) that fail to include business development or IT professionals and the partnership model itself are more to blame.
Ben, I am in full agreement with your views – as a former Global 5 CIO have looked at the numbers and like you am not convinced there is an economic case to be made to move to the cloud. There is however a case to be made for the need to embrace new to the market SaaS apps to address specialty needs.
BUT — without Leadership support for a fundamental re-think of internal approaches to the practice of law and the funding to make it happen BigLaw (anylaw) regardless of its technical platform, will be hobbled and, in the long term at risk.
I think it is true that larger firms look down on IT and see it as a mere overhead rather than a productivity / profitability driver, as Ben has suggested.
I think the justification for cloud adoption is not merely about TCO / costs, as Brian says, you get a much more agile system when moving to the cloud, and IT convergence / integration becomes much more feasible as well. Cloud computing is not a silver bullet and no doubt the 70% that currently run a hybrid cloud and on-premise IT infrastructure will continue, but given the massive skills GAP in It and particularly security and the velocity of change within IT, I think we will see more and more firms realising that a cloud model from a trusted managed IT service provider will be far more cost effective when in-house IT salaries are factored in. My team have certainly found that the total cost of ownership of cloud solutions are typically very close to on-premise ones and bring many strategic benefits that are not on a balance sheet.
Ben indicated a 30% cost difference, I can only say talk to a company that specialises in Cloud for the Legal sector as I feel he must have been quoted rip off prices or perhaps the provider in question was having to factor in learning at the client’s expense?
[Editor’s Note: Links to specific companies removed]
Alex – perhaps you can quantify exactly what you mean by “you get a much more agile system when moving to the cloud, IT convergence / integration becomes much more feasible” as I think plenty of law firm CIOs would disagree. Larger firms like to select what they consider “best of breed” systems and I have yet to see any “cloud” provider offer a fully hosted solution that provides a perfect match; so, it’s more about accepting less agility or lesser systems for the sake of someone else having integrated them. Also, not all larger firms “look down on IT” – that was not my point; firms that are not forward thinking don’t pay sufficient attention to things that are more strategic and require a longer than one year time horizon. There are some progressive BigLaw firms out there that are leveraging IT; they are in the minority, though.
Also, perhaps there may be a skills gap in some markets, but, that just suggests that those same “cloud” providers are competing with the internal law firm teams for the talent; it’s not an accurate assumpion to say that the most talented people always want to work for a managed service provider. I have seen plenty of instances where people left such providers to accept jobs internally at firms because it offers a different dynamic and an opportunity to tackle other challenges.
As for the recent comparison done for a firm based in London (which was a complete rip-and-replace of their entire infrastructure), the more expensive quotes were from three very well-respected, legal-specific providers of managed services that pride themselves on specialising in “Cloud for Legal” as you suggest. It was a straight TCO comparison over 5 years. The hosted solutions were less expensive in year one and two, but, by year three, it shifted and, by years four and five, the gap just widened. They quoted their best prices and even sharpened their pencils a bit, so to speak, and still were not as competitive.
Further, owning assets requires a larger up-front CapEx, but also provides tax benefits to the partnership model. Many businesses who don’t understand law firms and how they prefer to handle finance fail when pitching their offerings to firms as they can’t comprehend how firms have a preference for the CapEx spend over the OpEx.
I appreciate some people will continue to suggest that cloud is the magic solution that leads to fantastic cost savings and increased agility, but, I can honestly state in an unbiased manner that it simply is not the case. Sadly, it would seem that companies trying to sell “cloud” solutions will continue to repeat the marketing buzzwords over and over again until enough uninformed, non-IT people just believe it and buy into it.
I am regularly asked to consult and advise law firms in an independent capacity to talk about various business initiatives and find that, once managing partners and technology partners understand all of the relevant factors and are able to separate the wheat from the chaff, there is no one clear answer – and there is much less willingness to “drink the Kool Aid” of cloud. They pick and choose what services (SaaS or IaaS or whatever) they feel are most appropriate for their firms.
Ben totally agree with your conclusion:
” there is no one clear answer ” in on-premise vs cloud debate – but there is too much hype around cloud concept.
Like yourself, I am all about getting the right fit for my clients, and so am not a cloud pusher or on-premise die-hard
in terms of the skills gap I was thinking at the smaller end of the law firm market, where they are unlikely to be able to hire someone with expertise in every area.
“you get a much more agile system when moving to the cloud, IT convergence / integration becomes much more feasible” – what I mean by this is that when operating on a cloud model, we have found it far, far easier to make IT infrastructure that can adapt to changing business needs and scale up / down easily. Also it has allowed business-critical legacy systems, Hosted VoIP / Lync / UC to be integrated at minimal cost into CRM and project management systems – I hope this help clarify what I meant
Nice piece, Rupert. I agree completely.