Fourth in our series of Vertical Leaps
Despite a reputation for conservative stodginess, law offices are making strides in technology to rival their most tech-progressive peers.
Across the staid legal vertical, practices are enjoying newfound efficiency in productivity thanks to IT-powered improvements to how legal documents are processed, stored, archived and output.
Law firms are leveraging mobile and wireless technologies to shrink their real-estate footprint and reconfigure workspaces. Technology is also being used to level the playing field, giving small firms and solo practitioners the tools and capabilities once limited to large practices. Nearly a third of such firms (30 percent) told Robert Half Legal researchers recently that they are using such technology to manage higher workloads and to streamline communications with outside counsel.
Indeed, technology has changed much about the way law firms handle core competencies such as e-discovery and the tracking of complex contract changes by employing capabilities like advanced knowledge and document management and Big Data analytics. Technology has dramatically changed the realm of discovery. As the amount of electronic data grows exponentially, e-discovery remains both a growth area and a challenge for law firms and their corporate clients. As a result, technology spending at law firms remains on a strong upward trajectory.
According to the 2013 ILTA/InsideLegal Technology Purchasing Survey published by the International Legal Technology Association, 43 percent of the firms polled by the ITLA say they expect to increase their IT budgets in the coming year and 36 percent said they expect it to remain the same.
It’s no surprise, then, that data from the latest Ingram Micro SMB 500 list finds some 10 percent of the distributor’s most successful solution providers focus at least part of their practice on the legal vertical. The trend toward records integration, digital filing and advanced archiving gives these partners an edge in revenues and growth, according to the SMB 500 research compiled by Ingram Micro’s Business Intelligence Center and U.S. SMB Business Unit and channel research services firm The 2112 Group, the parent company of Channelnomics.com.
Ingram Micro SMB 500-listed VARs working on IT for law firms show three-year growth averaging close to 189 percent.
The Ingram Micro and 2112 data shows sales in the legal vertical focused on systems and software, but a solid one-third of the revenue earned in the legal space (34 percent) comes from print and related peripherals.
That matches figures from the ITLA survey that show print sales remain strong year-over-year in the legal profession, as do technology services from third-party providers. More than 81 percent of law firms polled by ITLA say they outsource IT services; 60 percent outsource printer services, up 9 percent from a year earlier.
The use of those print resources indicates the value of the opportunity for partners. Where enterprises spend 3 percent of their revenues on business printing and imaging, according to Gartner, law offices spend nearly four and a half times that amount, coming in at 13.7 percent of revenues spent on printing. That puts the legal vertical in second place among verticals, behind only the paper-heavy business of advertising, which spends 14.8 percent.
The primary document management and imaging needs of the modern law office revolve around:
- Billing – While communication and document distribution technologies have improved for businesses at large, law firms still wrestle with the need to catalog and track all document based activity in order to assign and bill that activity to the client.
- Case Management – Law firms generate a massive amount of documents in the form of depositions, contracts, briefs and memoranda. The industry has a strong need for a way to manage such documents so they can be attached to the appropriate case file, stored securely and retrieved easily with a keyword search.
- E-filing – Courts worldwide are raising incentives for lawyers to use paperless systems for filing, serving, storing and retrieving court documents.
Clearly, there are broad opportunities remaining in the legal IT space. According to last year’s American Bar Association technology survey only 15 percent of law firms had used any form of cloud computing. Forty one percent were still not backing up their digital files and just 4 percent said they’d won any new business via social media.
For all of its benefits and opportunities however, selling into the legal vertical, with its notoriously long sales cycles and convoluted purchasing processes, is not for the faint of heart. Before partners expand their practices with offerings aimed at the legal eagles there are some things to consider:
- Law Firms Are Different
Solution providers are accustomed to dealing with business organizations that operate more like teams – or at least benevolent dictatorships – that value cooperative input and collective agreement. Law firms, by their nature, are very different, and the larger the practice, the more stark the contrast. The legal profession values individuality and competition.That means winning over one person in the firm does very little to advance the sale in the minds of other decision makers. Partners need to build relationships and strategic alliances with as many of the firm’s partners as possible and be prepared to present an outcomes-focused view of solutions to different audiences in the firm including the CIO, practice leaders and influential end users.And remember, most law firms are set up as partnerships, meaning any money invested in new technology is subtracted from the profits of senior partners. The value proposition in an environment like this must be airtight.
- Think Like a Lawyer
The television stereotypes notwithstanding, the practice of law is performed under stressful conditions by highly competitive professionals groomed by years of schooling and experience to mistrust and question everything presented to them as fact. Partners need to understand that nearly every contact in a legal organization possesses this critical-thinking and risk-averse mentality.In addition to being nearly immune to superlative marketing claims on technology offerings, lawyers are frequently reluctant to try technologies that require them to change the way they handle their cases. Avoid setting off the lawyer’s challenge reflex by avoiding language like “best” and “fastest” and opting for more empirical metrics of speeds and feeds.And to overcome the institutional reluctance to change methods, consider offering a product trial to an inside advocate who can demonstrate the benefits of the solution to others in the firm on your behalf.
- Show Don’t Tell
For many of the same reasons that typical technology pitches fall short in law office settings, solution providers with legal practices find traditional outbound marketing and advertising efforts fail to resonate in the vertical.The proclivities of law professionals tend to make traditional ads making unsubstantiated benefits claims ineffective. The secret to reaching this audience resides in material that matches the argument-proof construct familiar to attorneys. Partners should offer in-depth, relevant information about products and services in the form of case studies that demonstrate benefits and value though the experience of peer organizations that face similar challenges.
Like many businesses of similar size and scope, law firms are embracing technology as a way to improve efficiency, cut costs, innovate new services and differentiate themselves in a competitive marketplace. Because of the nature of their business, that puts a significant opportunity in from of IT partners who can deliver the kinds of document management and printing and imaging solutions that lawyers rely on to ply their trade.
That opportunity comes with a caveat, however. The idiosyncrasies of the legal industry can make this vertical a tough nut to crack. Solution providers hoping to sell technology products and services into law firms need to focus on the unique buying characteristics of legal decision makers and come prepared with presentations, demonstrations and marketing materials that address the needs, desires and fears that influence this critical and discerning audience.