Out with the old it in with the new by david cunningham - sep 2009
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This document discusses how law firms can control costs while maximizing the value of their technology investments. It recommends that firms streamline their IT infrastructure to reduce costs and complexity, freeing up resources to apply technology more to legal practice. Specifically, the document recommends virtualizing core systems, optimizing storage, and consolidating data centers. It also suggests evaluating outsourcing some IT services and using practice technologies like document management systems and relationship mining software to enhance client services. With good leadership and the right balance of people, process and technology changes, firms can improve productivity, client relations and gain efficiencies from their technology.
Out with the old it in with the new by david cunningham - sep 2009
- 1. ControllingCostswhileGettingtheMostOutofYourTechnology There is an irony to IT in law firms: Firms spend so much time on issues like IT infrastructure and upgrade projects that they spend too little time using technology to improve how lawyers work. Lawfirmscannotachieverealvaluefromtheirtechnologyinvestmentsuntiltheychangethis model.Moreover,changingtheusualmodelcanloweroverallITspendingwhileincreasing stabilityandlawyersatisfaction.WithourlawfirmITbenchmarksreflectingthatthehighest spendingfirmsspendtwiceasmuchperlawyerontechnologyasthelowestspendingfirms, thereisalottobegainedbyincreasingtechnologyefficiencies. Withgoodleadership,streamliningITinfrastructureandrebalancingattentiontoITpractice technologies,lawfirmscanhaverealeffectsonproductivityandclientrelations. AversionofthisarticleappearedinLaw.Com'sLegalTechnologyNewsletteronSeptember2,2009
- 2. A Firm’s Best IT Investment: IT Leadership Basedontheassessmentsofhundredsoffirms,itisclearthataleadingfactorinthequality andvalueofafirm'stechnologyistheproficiencyoftheITdirector. AgoodITdirectorwill buildasolidteam,communicateeffectivelywithlawyers,planandarchitectwithaneyetothe future,emphasizetesting,beasmartpurchaserandbettercontrolthefirm'svendors.Every dollarpouredintoagoodITdirector orCIOpaysbackintermsofriskmitigation,hasslere- ductionandcostcontrol--notnecessarilylowercosts,butbettercontrolofspending. EvenagoodITdirectorcanbecomeineffectivewhenworkingwithtechnologyleadershipinill- definedroles.AnITleaderneedsfourthingsfromthefirmoutsidetheITDepartment: 1 representative feedback from a static group or a topic-specific group; 2 authoritative decisions; 3 qualified advice, recommendations and planning; and 4 advocacy. Firmsoftenassumeatechnologycommitteeservesallfourpurposes.Inpractice,atechnologycom- mitteeisoptionaloratleastinabackseatrolecomparedtoaqualifiedtechnologypartnerandCOO. Streamline IT, Not Just a Little, But a Lot It'scommonforafirmtospendmorethan80percentofitsattentionandITstafftimeoninfra- structureandlessthan20percentonapplyingtechnologytothepracticeoflaw.Theaimof streamliningITsystemsandprocessesshouldbetoreversethisbalance. ForITinfrastructure,theobjectiveisstraightforward:toprovideahighlyavailablefoundation thatrequireslesseffortandcosttomaintain.ConsolidatingITsystemsviavirtualizationsoft- ware(allowingmultipleserverstorunoneachphysicalservermachine)hasbeenarealityfor anumberofyears,buttheactualbusinessresultsareoftenunderwhelming.ITstaffshave gainedinitialsuccessbyreducingthefirm'stotalnumberofserversand,sometimes,software licenses.Theseeffortsaregenerallyfocusedoncleaningupancillaryandolderservers.Think ofthisasStage1instreamliningIT,oftenwithamoderateornetzerogain.Stage1helpsIT staffgainexperiencewithvirtualization,reducethenumberofserversandreducedatacenter needs,althoughthesegainscanbeoffsetbythecosts,complexityandinitialeffort. ItispossibletostreamlineITsystemsmuchfurtherandachieveareal,positiveeffectonrelia- bility,recoverycapabilities,ITspendingandstaffinglevels.WecallthisStage2.Thisrequires afocusnotjustontechnology,butonpeople,processandtechnologywithintheITdepart- ment.Youshouldexpectthislevelofstreamliningtoinvolveupfrontinvestments,althoughthe netresultoverthreeyearsshouldreduceoverallITspendingbyatleast15percentcompared totraditionalimplementations.Thisisimportant--ifyoucan'tmapyourprojectstotheselong- termbusinessresults,thenyoumaysimplybeincreasingcostsandcomplexityunderthe guiseofimprovements.Itiseasytoarguethatwhilespendingreductionsarecritical,ofmore importancearebetterdisasterrecovery,reliabilityandlevelsoflawyersatisfaction.
- 3. Key aspects of streamlined IT includes: Application packaging and delivery. StandardizationofthePCbuildisafundamental attributeofwell-runITdepartments,anddoingsoactuallysupportsusercustomizations ratherthannegatesthem.CommonlyusedtoolssuchasWyse,UIU,Sysprep,KBOX and Microsoft'sSystemCenterConfigurationManager supportsoftwarepackaging,commonPC imagedevelopmentandapplicationdeployment.Theseupfronteffortscreatesignificant payoffinsupportneeds,reliabilityandeaseofrollingoutnewchanges. Consolidation and virtualization of core systems. Reducingthelocationsandquantityof serversrelatedtoExchange,documentmanagementandothercoresystemssimplifies management,reduceslicensingandreducesthenumberofdocumentlibraries.Addingnew serversbecomesanegligibleeffortandsystemrecoveryafterfailurescanapproachminutes ratherthanhours. Storage optimization. Storageisoftenallowedtogrow(eachgigabyteischeap),butthen becomesasignificantexpense.Intelligentmanagement,datadeduplicationandrecovery capabilitiesarebuiltintostoragesystemslikethosefromNetApp (whichcanalsomanageother vendors).Bycombiningsmartsystemswithgoodfirmretentionandarchivalpolicies(notably inclusiveoflitigationsupport),firmshaveliterallyreducedstorageneedsbyover60percent. IT data center. Oftenoverlooked,akeybenefitofconsolidationisthepotentialtoavoidor reducecostlypowerandcoolingupgrades. ThesechangeswillsimplifyIToperationsandstaffinglevelstooneITstaffmanagingin- frastructureandPCsforapproximatelyevery100-150users.Theupcomingreleaseof Windows7 and,assumedly,bettereconomicconditionsareexpectedtokick-startmore firmsintomakingtheseimprovementsoverthenext12months. Get a Reality Check about Outsourcing Evaluatingoutsourcingisuncomfortableforlawfirms.However,ratherthanconsideroutsourcing tobeanallornothingproposition,recognizethatvendorsprovideamenuofservicesfromwhich alawfirmcanchoose(hencethetermmanagedservicesisoftenused).Thereareasmall numberoflegal-specificmanagedserviceproviders(e.g., KenoKozie,mindSHIFT, Intelliteach) thatcanmatchyourinternalcosts,providelowerriskoffailureandsecuritybreachesandprovide deeperbenchstrengthofITskillsthanmostfirmscanafford. Therefore,itissmartforafirmtoundergoasourcinganalysistocompareitsinternalrisks, servicelevelsandcoststothoseofexternalvendors.Ataminimum,thefirmwillunderstandits ownareasofpotentialimprovements.Whileonlyaminorityoffirmswillturncoreoperations overtoavendor(e.g.,hostingandmanagingthee-mailsystem),allfirmsshouldlistandscru- tinizetheservicesprovidedbyIT.FourareastolookatITformanagedserviceopportunities canhelpfocustheanalysis: 1 services that are notably man-intensive but not user facing? 2 services that require specialist skills, but aren't full time? 3 services that require 24-hour attention? 4 services that need high capital investments? Onefirm,forexample,hadseveralITstaffemployedtorunbackupsandprovide24-hourmoni- toringofthefirm'snetwork.Whileonecouldapplaudthegenerosityoftheirmonitoringfocus, theywereabletoturntoavendorserviceforabout10percentofthefirm'spreviouscost.And frankly,thevendorwasabletoaffordbettermonitoringandtroubleshootingtools.Otherexam- plesincludehelpdesk (notablyafterhourssupport),databasemaintenance,wideareanetwork monitoring,securitycontrolanddisasterrecoverytesting.
- 4. Get More from Practice Technology WithITinfrastructurestreamlined,resourcescanberedirectedtoapplyingtechnologytothe practiceoflaw.Practicetechnologyobjectivesincludesupportingthequalityandprofitabilityof legalservicestoclients,whileenablinglawyerstospendmoretimeonhigh-valueworkand client-facingactivities. Atthecoreofpracticetechnologyisdocumentande-mailmanagement.Commonissuesare fragmentedclientmatterfiles(electronicandpaperfilesscatteredacrossmultiplelocationsand applications)anddifficultyfindingandsharingmattermaterials(lawyersandstaffperformre- dundant,inefficientsearchingandfilingactivitiesandredundantpaperfilesconsumeunneces- saryamountsofphysicalspace).Asaresult,whilegoodserviceislikelymaintained,itisdone withmoreeffortthannecessarywhileprofitsareunderminedandclientservicecouldbecom- promised. Suchpracticeissuesrequireablendofpeople,process/policiesandtechnologytoaddress.In relationtoelectronicmatterfiles,ane-recordsmanagementpolicyandretentionschedule shouldserveasguidesforwhatisstored,whereandforhowlong.Softwarevendorshavelong recognizedtheconvergenceofe-mail,documentmanagementandrecordsmanagement,so companiessuchasAutonomy (nowownersofiManage/Interwoven)andRecommind provide setsoftoolstosupportasingle,unifiedelectronicmatterfilefromopenthroughclose,andef- fectivee-mailmanagement. Astheeconomyhaschanged,oneofthefewareasinwhichfirmshaveinvestedmorere- sourcesisinnurturingclientopportunitiesandrelationships.Despiteinvestmentsinmarketing software,firmsareunsatisfiedwiththeirownabilitiestolearnwhomandwhatthefirmknows aboutclientsandpotentialclients.Passivetechnology,suchas ContactNet,minesinformation aboutrelationshipsfrome-mail,voicesystems,billingsystems,etc.Suchsoftwarecombines internalandexternalinformationsourcesandrequiresnoadditionalefforttokeepinformation current.Havingthissixdegreesofseparationnetworkavailableatalawyer'sfingertipscan enhancebusinessdevelopmentandhelptostrengthenclientrelationships. Theprecedentforfirmsusingtechnologytoenhancetheirservicedeliveryisunfortunatelylow. The2008AssociationofCorporateCounselValueChallenge findingsreflectthefrustration fromcorporatecounselonlawfirms'abilitiestoeffectivelybudget,staffprojects,trackfeesto budget,shareknowledgeandcommunicatestatus.Likeotherareas,technologycanonlyplay asupportingroleinimprovingthesebusinessfunctions,buttherearemanysimplifiedproject managementandcollaborativeextranettechnologiesavailableforfirms.Inatimewheninvest- Managing Director inginclientrelationshipsisapriority,providingclarityonmatterstatuscanbeafirm'sstrong Baker Robbins Company differentiator. dcunningham@brco.com Oneofthefastestchangingaspectstoclientrelationshipsisanarrangementinwhichafirm's David B. Cunningham is feesarebasedpartiallyonthesuccessorsatisfactionofthework-product.Tomakesuchan managing director of arrangementprofitable,afirmhastolearnhowtopricesuchwork,howtodefinesuccessor Baker Robbins Company. satisfaction,andhowtomanageprogressagainstthebudget.Fewfirmsareyetgoodatall He leads the Strategic threeareas.Technologycanplayarolenotonlyinmanagingmattertimeandbudget(as Technology practice where above),butalsoinprovidingaccesstoexistingfirmresources(templates,precedents,best he assists law firms with practices,experts,etc.)quicklyandeasily. mergers, planning, risk management, technology Matterandpracticefinancialdashboardscanprovidecurrentstatusandissueinformation.Any assessments and IT efforttocreateefficienciespayoffhandsomely,especiallysincearecentstudywithinprofes- optimization. sionalserviceorganizationsreflectsthatpeoplespend30percentoftheirtimesimplysearch- ingforcontent. Never before have firms been as willing to shake up the traditional focus of IT. While the age is over for IT departments to simply keep systems running, the role for IT in sup- porting lawyer productivity is the dawning of a new age for many firms. Formoreinformation,pleasevisitusatwww.brco.com ©2009BakerRobbinsCompany,aThomsonReutersbusiness.Allrightsreserved.