Many IT projects go on behind the scenes, with little or no impact on the solicitors and secretaries that constitute the lifeblood of every law firm. When technology does try to instigate major change on a firm's user base, the result is often a resounding failure.

Countless client relationship management, know-how and case management systems lie idle and neglected, despite the best efforts of their creators. This cannot be said, however, for digital dictation workflow software (DDS), which has emerged as the stellar success story of the legal software industry in the last decade. Lawyers and IT directors alike have been delighted with DDS – it is easy to install, intuitive to use and, as Nabarro Nathanson's IT director Nick Taylor-Delahoy once said, it is that rare breed of software that "actually does exactly what it says on the tin".

Competition between dictation software vendors is fierce, not least because there is little difference in how their products function, at least as far as the end-users are concerned. The developers' margins, once generous, have become very tight – witness the recent accusations from one major software provider that its rivals have been giving away their systems at cost price in a bid to gain market share, then trying to claw back into profit with premium-rate consultancy services. In the short term, DDS is relatively cheap to acquire, but the market for dictation software is small and buyers should consider the likelihood of consolidation among the suppliers.

At the last count, 63 of the UK's top 100 law firms by turnover have rolled out digital dictation workflow systems, but total usage is hard to gauge. A minority of firms have implemented DDS across a large network of international offices, while others are only using it in a few practice areas, or in one of their regional offices.

What is clear, though, is the extent to which the three major players dominate the market. BigHand has at least 30 sites in the top 100, including some of the largest and longest-established implementations in the world. Ashurst has long been the company's flag-ship site and a primary reference site – the firm's IT director, Chris White, was the first to roll out DDS firm-wide in a major law firm. Lovells, the highest-earning firm to have implemented DDS, is also a BigHand user. Despite its strong focus on selling to the largest firms, however, BigHand has not yet cracked the magic circle.

WinScribe, meanwhile, has at least 19 top 100 sites. Among its largest customers are CMS Cameron McK-enna, Irwin Mitchell and Shepherd & Wedderburn in Scotland. All but two of the WinScribe systems in the top 100 were sold by SRC. Perhaps the most notable law firm on SRC's client list is Baker & McKenzie, which signed up with WinScribe after pulling the plug on a BigHand pilot and has since rolled out WinScribe across a number of large offices around the world. Other WinScribe resellers with a foothold in the top 100 include Edict and Voice Technologies.

With 10 top 100 sites, nFlow can also be considered a major player, although it remains stronger in the mid-market. Its flagship site is Berwin Leighton Paisner, while other nFlow users include Salans, Reynolds Porter Chamberlain and Mills & Reeve.

Beyond the major suppliers, the secretarial outsourcer Voicepath has two top 100 clients using its services – Trowers and Hamlins and Howard Kennedy. A handful of firms, notably Davies Arnold Cooper, have eschewed the commercial DDS offerings and built their own workflow systems to handle dictation.

This leaves 37 law firms that do not use digital dictation workflow systems. These include the entire magic circle and some of its closest rivals, such as Herbert Smith and Norton Rose. Likewise, the UK practices of major US firms have all steered clear of DDS, together with the likes of Macfarlanes, Bird & Bird and Olswang.

Generally, the firms with the largest revenues have been slower to adopt digital dictation. Clifford Chance (CC) is understood to be taking a second look at the systems on the market and the software vendors are no doubt hoping for a domino effect in the magic circle. However, in a previous trial of a leading DDS system at CC, the users rejected it en masse.

It is easy to see why DDS is conspicuously absent in the magic circle. Dividing a firm's gross revenue by the number of fee earners gives a figure for the revenue generated by the average fee earner. This is widely used in the US to assess a firm's business model and its success. Revenue per fee earner within the magic circle averages £363k based on this year's Legal Week top 50 table. Contrast this with the £238k average for five of their closest rivals – Lovells, Ashurst, DLA Piper, Simmons & Simmons and CMS Cameron McKenna – all of which are using DDS. The business case for installing DDS is most persuasive at firms where fee earners generate lower returns, such as Eversheds (£161k) and Beachcroft (£118k). Cost-cutting is a fairly low priority at magic circle firms, so the case for DDS has to be argued on the basis of better audio quality leading to more accurate transcription and dictation workflow software delivering faster turnaround times. Clearly, none of the software vendors have convinced them yet.

Beyond the top 100, the picture is very different. BigHand, WinScribe and nFlow remain the biggest players. They have less market share than they do in the top 100, but relative to each other their positions are broadly similar. WinScribe has resellers that focus on specific regions and others that tackle the smaller end of the market. These include XKO, Welgo, Voice Technologies, LFM, E-Dict, England Crowhurst, DCML and Abacus. BigHand still sells direct. G2 Speech, FLOvate and Crescendo have no market share in the top 100 but they have gained some ground in the mid-market.

Email dictation

Lawyers have been using portable dictaphones for donkey's years, moving on in recent years from tape recorders to hard disc recorders, which, in theory, enable them to email their dictations back to base rather than lugging the tapes around until they get back to the office.

In the past few years, dictation software developers have created increasingly sophisticated applications for remote working, making it easier and more secure for fee earners to send in their dictations.

Forsters, based in Mayfair, was among the first law firms in the country to install the WinScribe Anywhere application. "It gives our fee earners greater flexibility when working away from the office," says Douglas van Zijl, head of IT and finance at Forsters.

"[They] can quite literally be located anywhere and only need access to an internet-enabled PC to quickly and easily upload their dictations to the Win-Scribe system. This means dictations can be securely uploaded without ever having to worry about additional software or drivers."

The WinScribe system runs over Forsters' firm-wide Citrix thin-client operating environment, with all Forsters' fee earners using a portable Olympus DS-4000 handheld digital recorder for input. The Olympus machines have been customised to use the firm's preferred folder structure.

"A proportion of our transcription work is outsourced," van Zijl says. "Because the WinScribe system is compatible with a huge number of file formats and is widely used by outsourced transcription service providers, we have been able to adopt these services without any disruption to our working practices. Our fee earners simply select the relevant job type and where appropriate, the dictation is routed to our outsourced provider. The whole process is extremely simple."

Many law firms use Citrix networks to allow remote-working lawyers to access the office systems. The inability to send dictation files via Citrix used to be a major source of frustration, but the technical issues have now been solved and all the major DDS software packages support Citrix.

WinScribe rival nFlow has reported a significant increase in sales of its Citrix and Microsoft Terminal Services thin-client solutions in the past 12 months. Manchester-based firm Dootsons has rolled out nFlow's Dictaflow DDS to 22 users over a Citrix infrastructure, covering three offices, while Ipswich-based Gotelee & Goldsmith recently completed the implementation of a system for 75 users in two offices, using Microsoft Terminal Services. Managers at both firms have been impressed with the speed of operation, saying that users see no difference to using a normal PC.

"We implemented Citrix to provide a consistent user service across our offices while centralising administration of our system," says Steve Rayson, IT manager at Dootsons. "The introduction of support by DDS sup-pliers for this kind of infrastructure meant we could still take advantage of the technology.

"The project has gone extremely well and we have quickly seen the benefits of reallocating transcription across our organisation, particularly when staff resources are low within a department or office."

National firm Cobbetts is also encouraging its fee earners to use its dictation system out of the office, via Citrix. "Our commitment to providing flexible working facilities for our staff helped us earn 12th place in the Sunday Times 'Top 100 Companies to Work For' survey in 2004," says Michael Shaw, Cobbetts' managing partner. "This continued commitment, coupled with WinScribe's excellent remote working facilities, will see all our staff benefit from even greater flexibility, no matter where they are working."

To date, the largest installation is probably Eversheds' deployment of BigHand3, to 2,500 users in 10 offices across the UK, which was completed in March 2006. The firm recently announced plans to extend the system firm-wide, rolling it out to 18 international offices. The BigHand rollout ran simultaneously with 'Project Evolution', a firm-wide upgrade of Eversheds' desktop systems – a major logistical and technical challenge by any standards.

"No other law firm had ever provided this technology to this many users so we were in completely new ground with the scale of the project," says Sue Shepherd, Eversheds project manager. "We worked closely with BigHand to plan and overcome the various barriers that arise when voice is transferred between 2,500 users – both their experience and the strength of our internal IT team were critical. As a result the rollout has been very smooth and perceived as excellent across the firm."

"The system has certainly made an impact on client service," says Dianne Leatherland, a department manager at Eversheds. "We had one legal adviser who had worked late and produced a long list of documents that were needed by the close of business the next day, for a critical deal. We were able to complete it using secretaries from around our offices so we easily met the deadline."

Fladgate Fielder has also recently finished a large-scale DDS rollout. "As an IT team, we strive to offer integrated technology to our users and nFlow under-stood this from the start of the project," says Chris Steadman, head of IT at Fladgate. "They have worked closely with our internal development team to provide enhancements and to ensure that the product is fully integrated with our existing systems."

The project required the integration of the DDS with Fladgate's Aderant CMS Open practice management system and Interwoven WorkSite8 document management system, following Interwoven's 'workspace' concept, so that the DDS worked in the same 'matter-centric' way as the document management system.

"The project had a clear objective from a HR perspective of leveraging the benefits of digital dictation as soon as possible," says Jean Major, head of HR at Fladgate.

Essex firm Holmes & Hill has integrated its nFlow DDS with its Visualfiles case management system, with the goal of making document production a 'holistic' process. On a practical level, this has effectively dealt with the problem of the non-standard standard letter, which is common to most firms that are driven by case management.

"We had already implemented Visualfiles and observed a situation where fee earners were still dictating bespoke documents when there were standard documents available," says Holmes & Hills' IT manager, Trevor Sleeman.

"The fee earners reported that often the standard document did not fit the exact case scenario as well as they would like. Creating bespoke documents produced an overhead in maintaining the integrity of the case history, resulting in a dislocated process that detracted from the potential benefits offered by Visualfiles."

Sleeman says he chose nFlow because it was the only DDS supplier that was prepared to start work on the integration before he committed to buying its product.

Now the two systems are fully integrated, fee earners can dictate amendments to standard documents or new documents, all linked directly to the case history.

When a secretary opens the transcription for typing, the system automatically opens the appropriate document history on the case without the secretary having to do anything. The resulting transcribed document is then saved straight in to the Visualfiles case history and an item is added to the fee earner's agenda to proof the document.

So far, most DDS rollouts have been limited to firms' UK offices, but extending the systems' reach overseas is becoming a priority for some firms. Ince & Co has already rolled out BigHand3 in London, Paris, Le Havre and Piraeus and recently announced plans to install it in Hamburg, Hong Kong, Singapore and Shanghai.

Ince's highly-rated shipping and trade practice includes an 'international emergency response team' which travels to major disasters or incidents, taking statements from many of the parties involved. Most of the firm's secretaries are in London, but the DDS system allows the response team to send statements back to base for processing from any PC with an internet connection.

"For some time we have offered a seamless remote access system where lawyers have quick, easy and secure access to their desktop from remote locations or international offices," says Frank White, head of IT at Ince & Co. "The only piece of the remote working jigsaw that remained was the dictation infrastructure. Digital dictation workflow has solved both language support issues and the problem of travelling and working across different time zones whilst maintaining productivity."

Worldwide use

It has long been assumed that DDS would never take off in the US because attorneys on the other side of the Atlantic are far better at typing than their European counterparts – at least, the younger ones are, and the older ones are reckoned to be resistant to any change involving the introduction of IT systems.

However, a recent win by BigHand challenges the very notion that dictation software is a non-starter across the pond. Godfrey & Kahn, based in Wisconsin, has rolled out BigHand3 across its five offices, prompting the supplier to open an office in Chicago.

"We were looking for a server-based, centralised digital dictation system for several years," says Scott Bingenheimer, telecommunications/video analyst at Godfrey & Kahn. "The old tape-based system was antiquated and very inefficient in terms of back-up transcription support and having to transfer a physical tape.

"However, the wrong digital dictation system actually increased costs due to the additional support required and we had to keep the taped-based equipment as a back-up. Plus, it did not improve any efficiencies. Once we brought in BigHand we never looked back."

Australia has also emerged as a major market for DDS – unsurprisingly, perhaps, since it is virtually home territory for New Zealand-based WinScribe, whose UK competitors have not been slow to open offices in Australia. Clayton Utz, one of the country's 'big six' firms, has rolled out BigHand to 1,200 users in seven offices, while Minter Ellison has installed DDS in its Brisbane office.

"We knew what we wanted from a digital dictation solution," says Rolf Moses, people and development director at Minter Ellison. "It had to be more reliable than our aging tape system, which was impacting on productivity because of broken or inaudible tapes. We also needed a system that could dramatically improve our support staff's ability to get through their workload and to function effectively in our team-based environment."

Also joining the fray is nFlow, which has appointed local reseller Timeframe to champion its software. However, both UK companies face the same challenge that WinScribe faces in the UK – convincing law firm IT directors that they can support their systems from halfway round the globe as effectively as the local supplier.

Meanwhile, Copenhagen-based Plesner, one of Denmark's largest firms, completed its WinScribe rollout this month. The news comes hot on the heels of recent implementations in Brussels and Moscow, consolidating WinScribe's entry into continental Europe. The language may be different, but the firm's requirements echoed those of most UK firms that have installed DDS.

"Providing a rewarding and flexible working environment for all staff is central to our approach, so the ability for the digital dictation system to support remote working was a crucial factor in the evaluation," says Lars Tolle, Plesner's IT manager. "Not only do our lawyers need to be able to work away from the office, but on occasion a number of secretaries also need to work from home. With our old analogue tape system both these options were impossible."

Return on investment

DDS might not cost nearly as much as a major practice management or document management installation, but it still represents a sizeable investment for most firms. The vendors' predictions for return on investment have taken a lot of stick in recent years, but most firms have reported efficiency gains after taking the plunge.

One of the first firms to go digital, Irwin Mitchell, has now processed more than one million jobs via DDS and is well-placed to comment on the long-term advantages delivered by dictation software. "With more than 1,000 hours of dictation being created by our fee earners each month, it is crucial that our digital dictation system can provide uninterrupted, robust performance day in and day out, and that is just what our system has delivered from day one," says Richard Hodkinson, director of operations at Irwin Mitchell.

His comments are echoed by frontline users. "The days of being snowed under with work and having tapes go missing are thankfully a distant memory," says Janine Gates, a secretary at the firm.

"Our workload is now much more evenly balanced and if we are experiencing a particularly busy period our colleagues in London can easily pick up the work. It is all very simple and straightforward."

Irwin Mitchell is remaining tight-lipped about the actual amount of money it has saved by using DDS – understandably so, because it is a hard thing to measure. However, Osborne Clarke has been less coy, predicting a saving of £2m over the next five years. The firm's DDS deployment has a long way to go, but if its expectations translate into real, measurable savings of that magnitude, the case for using DDS, which is already strong, will become irrefutable.