Is Law Firm IT Obsolete?

It’s a question increasingly being asked. One of the keynote speeches at LegalTech this year focused on the idea, suggesting that the IT departments of corporate clients are better suited to handle litigation-related data management functions currently performed by law firm IT resources.

It’s really quite simple as to why this has become an issue. There is an economic disconnect between the value delivered by law firms in implementing technology and the amount it costs. Law firms simply aren’t good at designing or executing great technology strategy, but they charge a lot for it when they try do it.

One thing that separates our customers from their law firm bretheren is that they actively bring us in to manage large data sets other firms routinely bill their clients for — even in some cases when they have substantial in-house resources. Why would they do that?

First, the firms save their clients a lot of money. Managing electronic evidence is our core expertise, and our bill rates are lower. Our law firm customers love delivering value for their end clients. Part of the reason we are so passionate about solving problems for our law firm customers is that these firms get it. They appreciate what we bring to the table and in turn, we work like crazy to justify that faith.

Second, the lawyers at these firms get better technology service from a company like ours than from their in-house department. We aren’t an overhead expense. We don’t have political issues to navigate. We don’t jeopardize their core legal fees and in fact, help to protect them. We build our own products. We reinvest our profits in innovation. We survive and thrive by being better. It’s self-evident in a way.

Finally, we free lawyers to refocus on their core value add which is the intellectual capital involved in managing legal risks. And when they focus on their highest value services, clients are happier and fewer fees are written off. Their clients get better legal services and better technology services for less money (see #1).

Law firms are really good at hiring, training and promoting lawyers — not computer scientists or creative design experts. It might be that in-house technology departments for law firms don’t make sense for these functions, even on a day-to-day basis.

I’ll make an analogy to the car business. Car manufacturers know how to make cars. They focus all of their energy and effort and put all into manufacturing and marketing really great cars that are safe, fast, efficient, and comfortable.

But they don’t make tires. And the cars they make have to have tires. Tires are critical to the performance of their product. It is not possible to sell a car without tires! But car companies leave tires to the tire companies, and focus on their core functions.

It’s a question we’re asking our law firm customers. Are you spending your time building a better car or trying to figure out how to make a tire?