Year of the cloud

COVID-19 has forced much IT change on the legal profession and the organisations it depends on, and at a far faster rate than anyone would have predicted at the start of the year. But many have not yet made the leap to fully digitised office systems. The Journal spoke to some of the profession’s IT suppliers, to find out how they view it now.

While there is no doubt that nearly everyone has gone in for online conferencing tools, as an essential aid, they have not all been ordering smart new case management systems. Partly this is due to the uncertain business outlook and the need to conserve cash flow. “The buying profile has switched from aspirational to minimum necessary only,” reports Simon Greig, sales director at LawWare. “Some firms have taken the opportunity downtime offered and looked hard at their processes in order to do more with what they have. In the harsh light of day most have not. Our impression is that the survival instinct was too strong for anything else to get a look in.”

His CEO Warren Wander adds: “There’s been support for the home office environment and tools needed, and an interest in security considerations when working from home. In addition, many have taken the opportunity to benefit from training and support (hence we launched the LawWare Academy and more webinars). Doing more with what they have seems to be a key theme.”

Clio’s general manager, Colin Bohanna, has a slightly different take, with the profession seeing the urgency of using various cloud based and client centred technologies: “Tools that connect clients with lawyers online, support clients digitally, and help firms collaborate and communicate remotely with their peers and their clients have become table stakes.”

In this he sees a client-led demand: “Data from the 2020 Legal Trends Report show that the majority of consumers also favour a lawyer who offers technology solutions, with 69% preferring to share documents electronically and 56% preferring videoconferencing over a phone call. These client-centered technologies will become the norm as lawyers and clients both acclimatise to the convenience and affordability of these solutions.”

Grant Yuill at Denovo has been trying to get his customers to look beyond their immediate need. “We’ve tried to work with the leaders of our law firms to assist with support, whenever they need it, so that they are hopefully able to look past the crisis and move their firms from the ‘react’ phase of dealing with COVID-19, and plan tech initiatives to innovate into what will become the ‘new normal’ of law practice.”

Mixed picture

Yuill sees a mixed picture in the market. “The more established firms are holding tight; they are looking for continuity and the security of a system that works for them. Some are making the change and looking for better solutions to everyday tech, but a fair few are hanging on to what they have and just hoping to ride things out until next year when hopefully spring will see things in a better light.”

Waterstons’ Steve Williams records an increase in demand for technology, platforms and systems to facilitate the shift to remote working – though its specialist M&A practice, which he heads, has seen the level of deal activity reduced. He has noted the adoption of cloud-based storage and collaboration tools; squeezing of laptop and webcam supplies due to demand; and sales of server/network infrastructure to allow greater connectivity and flexibility for out-of-office working.

Interestingly, Yuill reports: “One thing that stands out from our perspective is the number of startups emerging during the pandemic. Understandably, firms are paying close attention to profitability of work types, and we have seen whole departments being made redundant. This has led to new startup firms looking for advice on what they can achieve pretty quickly, and some need a lot of guidance as this is a new challenge that they haven’t faced before.”

Whether or not clients have been investing much, LawWare’s Wander notes that lockdown has forced them to innovate in all aspects of their business, including marketing, as their high street physical brand presence is restricted. Echoing Yuill, he adds: “In addition, it has highlighted leadership challenges for managing a remote workforce, as well as made positions redundant whilst creating opportunities for lawyers to set up on their own.”

Haves and have nots

Lockdown has not necessarily closed the gap between those who tried to keep abreast of the available IT and those who did not. “Whilst there are firms that have operated without paper for a number of years, it’s not right to say that they have had an advantage, because things haven’t changed that much for them,” Greig claims. “What is true is that firms that relied on paper files and manual processes have been much disadvantaged as a result of the pandemic. Inefficient processes are now more inefficient and therefore more costly in time and effort, and firms are not able to increase their fees in order to cover this, so are therefore worse off.”

Are many firms still in the latter category? Yuill believes there are. “A recent report stated that only 30-35% of small law firms are using the likes of modern practice management software. In comparison, larger firms reported a 62% usage rate. Those are some staggering stats and if you’re not part of that 30-35%, you need to start really thinking about how you are going to shape your firm’s success in 2021 and beyond.”

He continues: “What the last few months have done for many firms is force them into having a look around at the technology they are currently using. They’ve had to ask themselves if that technology is making this transition to running their business remotely easy or is it causing more problems than it solves. Whether it’s an unreliable server, a temperamental internet connection, or case management software with the wheels falling off, out-of-date technology will really slow a firm down.”

Bohanna describes the divide in this way: “The future is already here; it’s just not evenly distributed, and law firms are still catching up.”

The next chapter

What might be coming down the line, in terms either of market trends or new tech? Waterstons’ Dan Burrows reflects the position of most in commenting: “We do not expect a return to the way things were. Flexible and homeworking will be adopted across all sectors.” That will involve tools like Teams and Zoom, and cloud-based services will continue to increase in popularity, having come into their own during the pandemic.

He adds that on the M&A front, “due diligence will need to be still more comprehensive, with technology due diligence taking a more significant role”; further, even for deals not involving IT companies, “technology in the supply chain or other key domains speaks directly to value”.

Yuill also warns against thoughts of going back to where we were. “Allowing a reflex return to more conventional ways of working in any firm, even for just a few more months, risks undermining their ability to compete over the next few years. Firms who ramp back up their use of paper and retreat from the intensely agile model of the last few months might quickly find themselves literally years behind direct competitors.”

Rather, previous resistance to hybrid or agile operating models – with workers based partly or wholly remotely – will crumble in the face of employee, and client, pressure.

Bohanna predicts we will soon see “technology that vastly improves service and communications between lawyers and their clients, making it faster, easier, and more convenient for lawyers to share information about client matters without having to rely on meetings in physical office spaces”.

Wander promises that LawWare has “a few things up our sleeve” – but we will have to wait and see what those might be.

He further remarks: “At present, we’re seeing a pent-up busyness just now in areas such as property. However, it’s likely this will nosedive as we reach the end of the year, and next year could be challenging economically. Firms will reconsider the need for physical offices and their working practices. People’s minds will be more focused and operations leaner – perhaps a well needed shakeup and wakeup call?”

Concluding thoughts

While choosing the best system for your firm can be daunting, Bohanna flags up the importance of considering long term goals over any specific features that may seem attractive in the short term. “It’s also important to look at legal case management systems as more than just a single piece of software,” he adds. “Whether it’s word processing, email clients, electronic calendaring, document assembly services, client intake databases, bookkeeping systems, or other specialised legal tools, modern law firms typically incorporate several technology solutions into their office workflows. To ensure a seamless transition to the cloud, it’s important to do your due diligence and focus on what’s truly important to your firm’s ability to continue to work as a cohesive team.”

For Waterstons’ Williams, the pandemic has demonstrated that flexibility and adaptability in the face of uncertainty can make the difference between survival and failure. Looking at the broader picture, he concludes: “Businesses will need to work resiliently, but also move quickly to take advantage of opportunities that are thrown up by the uncertainties of the pandemic and Brexit. This means that legal practices will need a ready network of alliances with partners that can be deployed quickly to respond to their own and their clients’ opportunities.”

The overall message is if you are not already looking at upgrading any less than streamlined processes, can you afford to fall further behind?