Mythbusting! The in-house IT top ten

Have you heard the one about the Minotaur that told the GC to slash her spending by half or face the wrath of Zeus? We’re not busting that kind of myth here, but myths and preconceptions that legal departments have with regard to technology.

Myth: Legal departments can’t keep track of everything external law firms are doing.

Busted: Both large and small legal departments need a system to track each matter being worked on, who’s in charge of it internally and at the law firm, and updates (especially material updates). It’s also important to have a process for closing matters, so active matters can be accurately tracked. With an automated matter management system, in-house counsel can update and share all their information in one place, keeping the matter knowledge at their fingertips and preventing unwanted surprises.

Myth: Law firms will be unhappy using collaboration tools, and your relationship could be damaged.

Busted: our law firms are probably already using these tools with other clients, providing data and building relationships.

Myth: Matter management and e-billing software may break lawyer-client confidentiality.

Busted: All software and email systems have system administrators that could potentially read privileged information. However, a legal department management system will be a permission-based system for the protection of privacy.

Myth: Cloud software isn’t secure.

Busted: Any reputable cloud-based legal software will have industry-standard security certifications, which often require the system to resist attempted hacking by auditors of the certification. These companies should be able to satisfy any security questions that your IT department may have. The information should also be backed up at another location, in case of natural disaster.

Myth: Legal e-billing doesn’t work internationally.

Busted: Starting with the EU, firms may now bill using the standard known as LEDES 1998BI. Hard copy invoices are no longer required, nor are PDF copies in countries that follow the EU VAT regulations. In other countries, law firms can still upload PDFs of invoices through e-billing systems to comply with the country’s law. With a few exceptions, legal e-billing is now accepted throughout the world.

Myth: Law firms can’t budget for litigation.

Busted: The plea that you can’t budget for something as complicated and unpredictable as litigation has worked for decades, but legal departments are pushing back due to increased internal pressure. A budget can be done without much difficulty, as long as everyone agrees to the assumptions: (1) it is based on the law firm’s present knowledge of the case and their past experience; (2) it may change if the case does; and (3) there is no need to budget for unknowns like an appeal until the time comes. The key is to define the assumptions in the scope, and if those change, change the budget.

Myth:Outside counsel will balk at billing guidelines and rate negotiations.

Busted: Many legal departments now have strict billing guidelines to which all their law firms must adhere. More and more, legal departments negotiate rate increases, rate freezes, or an overall blended hourly rate. Firms may complain, but in fact they are already doing this for other clients.

Myth: In-house lawyers don’t have time to enforce billing guidelines and rates.

Busted: Many lawyers don’t look closely enough at bills before approving them, but this process can be streamlined and, to a degree, automated. Software can automatically flag violations of billing guidelines, budgets and approved rates, and allow for permission-based access. As a result, both time and money are saved.

Myth: Alternative fee arrangements (AFAs) are too difficult to use regularly.

Busted: The AFA revolution has been steadily building over the years, fuelled by the inherent conflict of interest created by the billable hour. There are many variations of AFA, but a good place to start is to identify matters that your legal department works on regularly, where the average cost can be tracked. Once that is known, a flat fee can be negotiated for all those types of matters.
With experience of the arrangements, it will be easier to move on to more complicated AFA agreements.

Myth: The value of a legal department can’t be quantified.

Busted: Often, general counsel do not necessarily know the outside legal spend, or who is working on what matters. A legal department management system allows all this information to be tracked and reported on. Savings attributable to a legal department through AFAs etc can then be easily quantified and reported on, along with any reductions in overall spend.

Legal departments can identify where legal cases are originating, showing a need for employee training. The legal department is a cost centre and at some point you will need to justify its headcount and demonstrate value.

Conclusion

While lawyers aren’t generally known as early adopters when it comes to trends and technology, a company’s employees generally will be up on the latest business technology. Breaking through misconceptions about technology and how it applies to the practice of law is an important step in making your legal department more efficient and able to show its value.