Operational Efficiency Gives Firms Edge Against Alternative Service Providers, Survey Finds
The Aderant survey found an increasing percentage of law firms citing alternative legal service providers as their greatest competitive threat.
August 09, 2019 at 04:13 PM
4 minute read
Operational efficiency and pricing pressure remain the top challenges for law firms as they try to maintain a competitive edge in an increasingly crowded industry, according to Aderant’s 2019 Business of Law and Technology Survey.
One related finding was the shift in where firms see competition, said Chris Cartrett, executive vice president of Aderant, an Atlanta-based provider of legal business management software.
The percentage of law firms citing alternative legal service providers as their greatest competitive threat increased from 5% in 2017 to 15% this year, while those citing other law firms as their greatest competition decreased from 62% in 2017 to 53%. (The percentage of firms citing legal work moving in-house decreased from 29% to 22%.)
Firms that have implemented well-functioning business processes are more likely to be competing against alternative legal service providers for work that is higher volume and lower margin, Cartrett explained. “It’s good business—but you’ve got to have operational efficiencies to make money on that.”
To Cartrett, the increase in firms seeing alternative service providers as a threat could indicate that these firms are going after the same kind of business. “To compete, you have to provide that same kind of value,” he said.
This is the third year that Aderant has conducted the survey on how legal technology impacts firms’ business.
The survey’s respondents are legal business professionals at law firms—not lawyers—including C-suite staff, financial and IT personnel, project managers and firm administrators. Most of the 147 respondents work at larger firms. Fully 85% were at firms with more than 25 lawyers and, of those, 54% were at firms with more than 100 lawyers.
“There’s an underlying common thread in this survey about increasing operational efficiency,” Cartrett said. “The clients that our law firm clients are working with are becoming more complex. Serving them creates greater complexities for the firm, which strains current resources and ways of doing business.”
Making operations more efficient is a way to reduce those strains, he said.
For the survey’s respondents, 31% said operational efficiency was a top concern and 29% cited pricing pressure—outpacing increasing new business from existing clients (19%), winning new business (18%) and cybersecurity (17%).
One aspect of operational efficiency is timely invoicing of clients. Only about one-third of respondents (29%) said half or more of their firm’s invoices are processed through an e-billing or client spend-management system. But that’s up from 9% in 2018.
Fully 62% of firms said they publish client invoices in two weeks or less—38% in a week or less and 24% in one to two weeks. Another 20% said it takes two to three weeks, and 7% said it takes more than three weeks.
Delays in entering time, printing paper copies and lags in client adoption of e-billing technology were the friction points, according to the survey’s results.
One competitive advantage for law firms could be to provide clients a matter-management dashboard that allows real-time tracking of matters’ status and costs, Cartrett said. “It’s a way to provide greater value for your clients, so they have a stronger relationship with the firm.”
But such systems are still very rare, he said. “Some firms are still struggling to share documents.”
|Business Growth
More than 90% of the survey’s respondents said business this year is at least as good as last year. That said, 8% said things have gotten worse.
Comments from respondents who said business was better said that they are growing by expanding into other markets or are seeing higher demand and utilization or are retaining more clients with more profitable cases.
For firms saying business is worse, respondents’ comments attributed that to lower productivity and demand for their services or to changes in the insurance defense industry.
Interestingly, respondents at firms with leadership supporting legal tech and business initiatives were more likely to say this year is better—and were more likely to say they get invoices out the door in a week or less.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllOn The Move: Polsinelli Adds Health Care Litigator in Nashville, Ex-SEC Enforcer Joins BCLP in Atlanta
6 minute readAkerman Opens Charlotte Office With Focus on Renewable Energy, Data Center Practices
4 minute readNelson Mullins, Greenberg Traurig, Jones Day Have Established Themselves As Biggest Outsiders in Atlanta Legal Market
7 minute readTrending Stories
- 1Gibson Dunn Sued By Crypto Client After Lateral Hire Causes Conflict of Interest
- 2Trump's Solicitor General Expected to 'Flip' Prelogar's Positions at Supreme Court
- 3Pharmacy Lawyers See Promise in NY Regulator's Curbs on PBM Industry
- 4Outgoing USPTO Director Kathi Vidal: ‘We All Want the Country to Be in a Better Place’
- 5Supreme Court Will Review Constitutionality Of FCC's Universal Service Fund
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250