The challenges and solutions to investing in working practices and systems for small law firms

With expensive new technology flooding the legal market, it's easy for even the most cutting-edge law firms to fall behind the times. But leaving your lawyers to rely on outdated legacy systems and old-school processes will cost you more in the long run.

In the recent Bellwether 2023 report, 81% of respondents said keeping working practices and systems up to date will be a 'very significant' or 'quite significant' challenge in the next 12 months. Yet, there isn't much movement toward investing in new platforms, only in maintenance.

At 11%, respondents believe a client-facing online portal for updates is the most important piece of tech. So, for those planning on investing in tech over the next 12 months, this is an area for concentration.

Ashkhan Candey, Managing Partner of litigation law firm, Candey, warns, "Failure to invest in solutions to problems, whether process or systems, will result in lost time, more stress, lost talent, and ultimately, lost clients."

Although times are tough, if the last few years have taught us anything, staying stagnant is far more dangerous than taking a calculated risk. Invest in a system, process, or tool you know your people will benefit from.

Find out more about economic ways to attract new business in our recent blog.

What are the main challenges to investing in legal tech?

• Time to implement

Legal leaders often argue that they don't have time to choose and implement the correct legal tech. They’re under constant economic pressure to work more efficiently, drive new business, and be more competitive. They would rather focus on serving their clients and earning fees.

• A culture that is resistant to change

In our previous article ‘Is your Tech Smart’, we detail how managing change is one of the biggest hurdles facing decision-makers. Particularly when asking busy lawyers to adapt their working modes and insert new, unfamiliar tech into their daily activities.

Although opposition to tech lessened during the pandemic, a degree of resistance to change remains. Cultural hesitancy can fundamentally impact the use of new tech and impede your firm's progress.

Managing change effectively is key to implementing and investing in new tech.

• Budget constraints

The current economic climate, rising interest rates, cost of living crisis, and client pressure to reduce fees all contribute to budget constraints. Unfortunately, these pressures are expected to continue well into 2023.

Opposition to tech investment across all sectors often stems from the immediate expenditure of the investment.

However, law firms owe it to themselves, regardless of their size, to invest in the systems and platforms that will enable them to do their jobs better, quicker, and without the added stress. With costs for businesses and clients, increasing and further price pressures, firms must look even closer at how to work more efficiently and reduce costs.

• Disparate systems

Many firms have disparate and incompatible systems. If systems aren't compatible, it leads to inefficiency and risk. For example, if your systems can't share data, it will result in data entry problems, reduce automation, and lead to poor cybersecurity. Systems and teams must be able to collaborate to operate efficiently. Disparate systems and the accompanying issues and risks will undoubtedly lead to opposition.

Read more about the challenge of Integrating legal software in .

How can you solve these challenges?

Our article Making a positive business case for tech investment, provides tips and insights on solving these challenges.

To overcome cultural opposition, resource and budget objections to investing in legal tech, you should demonstrate its benefits.

Start by showcasing specific assets. Sweeping statements do little to assure decision-makers.

Pick exact processes and provide a structured and evidence-based case that shows precisely how the tech will improve operations. Explain the problems solved along with, the risks involved, the financial requirements from the law firm, and how the firm can measure return on investment.

Let’s examine a few strategies.

• Weigh up the return on investment of your time spent exploring these tech options vs the time these options save you.

Bring in as much evidence as possible. It’s compelling to show the exact amount of money tech will save, and the exact amount of labour tech will reduce. For example, Lexis+ helps 6 out of 10 lawyers work 10% faster.

The more specific, detailed, and evidence-based you are, the more likely you'll convince senior leaders in your firm. Showcasing exact improvements, substantiated by reliable and unbiased data, helps to present a positive business case for legal tech investment.

Now, of course, returns on investment are seldom immediate. But lawyers can counter that opposition by demonstrating the sustainable value tech provides.

Read more about the importance of monitoring your return on investment.

• Get company buy-in

To employ and integrate tech effectively, you need company buy-in. The first step is to engage with employees. Give them information from the beginning. Get their input. Explain how the tech addresses their problems or takes advantage of opportunities.

Reassure all employees that they’ll receive sufficient training. Keep everyone up-to-date and be transparent.

When making your case for specific tech, you must be ready to address and overcome current bias.

In our previous article How to make the right legal tech investments, we argue that lawyers need to show that legal tech will protect the firm in the future, allowing for long-term sustainability:

"To overcome opposition, you should demonstrate, preferably using reliable data and evidence, preferably substantiated by any number of reports that showcase the long-term value of legal tech, the failure to invest in tech and tech innovation, in a sector where firms of all shapes and sizes are increasingly recognising the value of tech, will inexorably leave reluctant and resistant firms at a competitive disadvantage.”

In many ways, the pandemic was our friend when it came to legal tech. Videoconferencing removed geographical limitations, cloud-based software enabled agile and remote working, and automation took care of tedious, high-volume and low-value work. Most importantly, the legal sector adopted a new attitude towards tech, becoming less sceptical.

Leverage these changes to encourage company buy-in.

• Explore the compatibility of each system you use and if you need multiple systems.

There’s no point investing in the latest, most up-to-date tech, if you can’t integrate or operate the tech in your current environment or skillset. The tech should always suit your capabilities and expertise, otherwise, it’s wasted. Tech isn’t a one size fits all solution.

A tech audit provides useful information to decide the way forward. An effective audit will invite contributions from people across the law firm, creating a more complete understanding of what is needed.

Explore how systems can be integrated. For example, integrating a case management system with other internal areas, such as legal accounting or online payments and website quotation tools with external third-party systems, such as government portals or identity verification services, can provide value to firms and the end client.

Rosalind Connor, Managing Partner at Arc Pensions Law, suggests following two basic rules.

"Talk to your staff, to your partners and your clients about what they want and keep talking because the answers will change! And never, ever invest in something you don't understand."

What are the benefits of integrating technology?

In summary, legal tech provides countless benefits to law firms:

• It improves efficiency by streamlining operations.

• Efficiency improves client service and satisfaction by meeting client expectations.

• It provides better collaboration between teams through standardisation.

• It increases productivity through the automation of repetitive tasks.

• It frees up your lawyers to spend more time on high-value work instead of boring, repetitive stuff and complete more complex matters faster.

• It improves employee satisfaction.

This list is by no means complete. It’s no coincidence that 75% of firms whose profits have increased over three years have also increased their tech investment over the period, according to ‘Is your Tech Smart’.

One thing is clear, resisting tech or avoiding it altogether is no longer an option. Law firms must make smart tech investments.

"An investment now in specific legal technology, such as a client CRM system, lays the foundation for future business growth and expansion," says Rita Gupta, Managing Director and Solicitor at LGFL Ltd.

Read our full Bellwether 2023 report and explore our insights on how to build a bold and beautiful business strategy for small law firms and solo practitioners.

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About the author:

Jay works with small law firms throughout the UK to help reduce risk, improve efficiency and increase profit through UU��ֱ��. Jay has been with UU��ֱ�� since 2011, prior to which he worked for a major international bank.

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The challenges and solutions to investing in working practices and systems for small law firms