Law Firms Becoming Tech-Savvy, Efficient Businesses? Thank Their Clients
At Thomson Reuters' 16th Annual Law Firm COO & CFO Forum, law firms discussed the extent to which the industry's recent evolution is directed and shaped by client business.
October 27, 2017 at 11:09 AM
31 minute read
There is a common refrain almost every legal professional has heard at one time or another: Attorneys are slow to adapt to change. James Perkins, chief operating officer and chief compliance officer at Procopio, Cory, Hargreaves & Savitch, usually likes to spin this refrain into a joke.
“There are only two types of lawyers,” he said. “Those who don't like change, and those who detest it.”
But some law firms are adjusting the way they operate to better match a changing business climate, using such technology as artificial intelligence and new billing models. And according to speakers in the “Boats Against the Current: The Evolving Law Firm Business Model” session at Thomson Reuters' 16th annual Law Firm COO & CFO Forum, this adjustment is happening because of clients.
“Innovation is really driven by the client,” said Lawrence Ballard, a partner at PricewaterhouseCoopers (PwC). ”The only way law firms are going to take it to the next place, in terms of getting ahead of the pricing pressures and other changing elements in the industry now, is through closer relationships with their clients.”
For Hal Stewart, chief operating officer at Wilson Elser Moskowitz Edelman & Dicker, client demand was instrumental in his firm getting on top of its billing processes, a problem facing many in the industry. “E-billing has now risen to cover more than 50 percent of firms' business, and firms are now trying to deal with over 20 e-billing companies.”
Wilson Elser took a proactive approach to e-billing, creating an automated billing systems that conformed to what its clients' billing and litigation guidelines expected. “You have to have the automation and tools to address this nightmare of tens of thousands of billing entries,” Stewart advised. “Otherwise, it's a flunk.”
To be sure, it's not just client guidelines that are spurring change at law firms. Unlike some firms, Wilson Elser “encourages alternative fee agreements (AFAs),” Stewart said. “It's through AFAs that we can determine how best to staff and have an engagement be profitable.”
He added that “AFAs are a necessity” for law firms that want to become more efficient and understand how they can offer more cost-effective services.
But Michael Caplan, chief operating officer at Goodwin Procter, cautioned that not all AFA engagements will motivate a firm to change its ways. “There are many times you do an AFA, and given the way your lawyers are trained, they agree to a price and then they never go back to have a project management conversation with the clients.”
This means the law firms are using the same number of hours to complete AFA work that they do for non-AFA work. “And they're miserable,” Caplan said.
What firms should understand, he explained, is that with AFAs, “it's not about the profitability of a specific matter, but the strategy you are trying to build within the firm and the relationship you are building with that client.”
“Invest big time” in new processes and technology, Caplan added, “and let your clients see you are trying to build a relationship with them” going forward.
Law firm change, however, does not always happen with client pressure and action. Sometimes, it can be reactionary too. Procopio, for example, implemented “data-driven marketing and advertising” to attract potential clients, Perkins said.
“In particular, in the business development side, we're moving away from the [conventional] marketing and communications aspect into a more focused approach using marketing technology and techniques to better target clients,” he explained.
And Procopio's data-driven processes do not just end at the client outreach. Over the past five years, the firm has also moved to better understand its spend on a more granular level.
“In the financial areas we have moved from a macro approach to managing profitability to what I call the micro approach, looking at profitability in very much detail,” Perkins said. Overall, this “was an important change for us, to both help educate our partners, and improve the probability of our firm,” he added.
There is a common refrain almost every legal professional has heard at one time or another: Attorneys are slow to adapt to change. James Perkins, chief operating officer and chief compliance officer at
“There are only two types of lawyers,” he said. “Those who don't like change, and those who detest it.”
But some law firms are adjusting the way they operate to better match a changing business climate, using such technology as artificial intelligence and new billing models. And according to speakers in the “Boats Against the Current: The Evolving Law Firm Business Model” session at Thomson Reuters' 16th annual Law Firm COO & CFO Forum, this adjustment is happening because of clients.
“Innovation is really driven by the client,” said Lawrence Ballard, a partner at PricewaterhouseCoopers (PwC). ”The only way law firms are going to take it to the next place, in terms of getting ahead of the pricing pressures and other changing elements in the industry now, is through closer relationships with their clients.”
For Hal Stewart, chief operating officer at
To be sure, it's not just client guidelines that are spurring change at law firms. Unlike some firms,
He added that “AFAs are a necessity” for law firms that want to become more efficient and understand how they can offer more cost-effective services.
But Michael Caplan, chief operating officer at
This means the law firms are using the same number of hours to complete AFA work that they do for non-AFA work. “And they're miserable,” Caplan said.
What firms should understand, he explained, is that with AFAs, “it's not about the profitability of a specific matter, but the strategy you are trying to build within the firm and the relationship you are building with that client.”
“Invest big time” in new processes and technology, Caplan added, “and let your clients see you are trying to build a relationship with them” going forward.
Law firm change, however, does not always happen with client pressure and action. Sometimes, it can be reactionary too. Procopio, for example, implemented “data-driven marketing and advertising” to attract potential clients, Perkins said.
“In particular, in the business development side, we're moving away from the [conventional] marketing and communications aspect into a more focused approach using marketing technology and techniques to better target clients,” he explained.
And Procopio's data-driven processes do not just end at the client outreach. Over the past five years, the firm has also moved to better understand its spend on a more granular level.
“In the financial areas we have moved from a macro approach to managing profitability to what I call the micro approach, looking at profitability in very much detail,” Perkins said. Overall, this “was an important change for us, to both help educate our partners, and improve the probability of our firm,” he added.
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 AllTrending Stories
- 1Gordon Rees Opens 80th Office, ‘Collaboration Hub’ in Palo Alto
- 2The White Stripes Drop Copyright Claim Against Trump Campaign
- 3Law Firm Accused of Barratry for Allegedly Soliciting Crash Victims
- 4Carlton Fields Downsizes in Move to New Atlanta Office
- 5Trump's Selection of Zeldin to Head EPA Draws Surprise, Little Hope of Avoiding Deregulation
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