Digital transformation for law firms

At the core, digital transformation is a strategic process that involves people, processes, and technology to create a more efficient and productive firm. In particular, it can support you with the challenges you face from an agile working perspective, cyber security, client communication, and employee retention.

From reputation management and employee and client onboarding to the financial health of the firm and general operational processes, digital transformation can help you and your team do more of what matters, both day to day and at a strategic level.

As a result, this can significantly improve the quality of service delivery and create a more organised and efficient working environment to help your organisation fulfil its purpose. We have set out a few of the wide-ranging benefits it can bring.

Eradicate the processes holding your firm back

Tired, ineffective and often manual processes impact everyone in the firm. This was a problem that Stewart Matthews, Managing Partner of Neves Solicitors, recognised. He identified that many of the team automatically printed large volumes of case notes and then posted these to clients. However, with the implementation of Access Legal Case Management they’ve seen a massive reduction in printing and posting costs and are now adopting a more paper-lite and digital-focused approach. In addition, Neves Solicitors are working directly with developers at Access Legal to improve other processes within the firm.

A digital transformation project can provide the tools to help your fee earners carry out their roles more effectively and with greater productivity and overall satisfaction.

Rid the firm of end-of-life or out-of-date systems

Many firms are moving to cloud-based solutions. Whilst there are wide-ranging reasons behind this shift, ultimately digital transformation can help future-proof software investments and provide a competitive advantage.

Here’s why:

• There’s no need to invest in additional hardware, such as server rooms or connectivity within your office. The software itself and the servers on which it runs are all taken care of by the solution provider.
• They can protect against cybersecurity attacks and data breaches. Having the tools to support your GDPR processes, for example, can help to avoid costly fines and a significant dent in your firm’s reputation.
• Having a robust disaster recovery process provides peace of mind. Law firms can ill-afford to lose access to their data for any length of time. A reputable cloud provider can ensure you’re covered with robust disaster recovery procedures.
• Running newer, tried-and-tested functionality usually leads to improved processes, greater efficiency and less time wasted. That means more time spent on client matters, increasing delivery time and, in turn, billing rates.
• The ability to scale the firm faster supports growth objectives and opens opportunities to serve new areas of law and attract and retain clients. A growing, thriving firm with a future-proof technology stack is also more attractive to prospective employees.

Save time and money and gain access to accurate data for more innovative, real-time decisions

Fee earners spend far too much time searching for information, whether in paper files, on a shelf, files on a desktop or server, or even disparate software systems. For many, there’s simply no integration linking all the data together. The purpose of the technology supporting a digital transformation project is to join up all the systems and make it easier to access your firm’s information and report on it, saving time and money in the process.

This makes it easier for partners to see what’s going on in the firm and provide the reporting and analysis they need to steer the firm in the right direction. Some of the benefits include:

• Access to live data: financial, payroll, time reporting, HR, training compliance, etc. Dashboards provide an instant snapshot of the KPIs that matter to you most.
• Accurate and timely reports: for example, the profitability of each fee earner, billing, or consolidated statements on WIP. A breakdown of actual and committed costs helps to provide a clear position on financials and ensure resources are well-managed. Draw up reports at any time, with no waiting until month-end, by which time they’re out of date.
• Smoother SRA inspections: with all information pulled from one central system, there’s no need to collect compliance and training records manually. This saves precious time and resources that could be devoted to running the firm.

Hopefully, you have a better understanding of what digital transformation could mean for your law firm, but how do you know that it’s right for you?

There are often tell-tale signs highlighting cracks in your current processes and systems, which could be causing your firm to struggle and limiting growth. See how many of the following signs apply to you:

1. Lack of visibility and control

Management teams don’t always have access to the information and reports they need when they need them, which can make it difficult to understand the overall health of the firm and report effectively to the board. This can result in constant firefighting, moving from one issue to the next.

2. Poor staff retention

Employee turnover remains one of the biggest and most costly challenges for firms. Recruitment, onboarding and training require significant investment. It’s estimated that upwards of 70% of a law firm’s costs are committed to staffing. Without the right systems, processes and support in place, managing workloads becomes increasingly difficult. Firms want to attract and retain the best legal talent, but tight margins can make that challenging.

3. Too much time spent on manual processes

Fee earners often complain about administrative burdens. This frustration affects not only lawyers but clients as well. Excessive manual tasks are usually a sign that processes are inefficient, which can negatively affect both productivity and service delivery.

4. Your systems are out-of-date or end-of-life

You know systems are becoming problematic when they create more issues than they solve. Technical failures may occur more frequently and reliance on unsupported software can leave firms exposed to cybersecurity threats and data breaches. The result can be regulatory risk, financial penalties and reputational damage.

5. Inadequate risk and reputation management

Poor service delivery can have serious consequences. Protecting employees and delivering the best possible client experience should be priorities. If systems, processes and procedures are not properly documented or followed, firms may be left questioning whether they are truly prepared for incidents, compliance challenges or business disruptions.

Lawyers are spending on average 13 days per month in the office.

Source: Legal Trends Report 2022

Once you've decided that a digital transformation project is suitable for your firm, you'll want to plan the steps you need to take and how the project will be managed. There are several points to consider:

Create a business case

This will articulate why the digital transformation project is essential for your firm, what will be involved, how it will improve operations, what the costs are, the expected return on investment, and what the project will mean for the firm's future. At this point, you'll have a clear vision of what you're looking to achieve.

Get stakeholder buy-in

Include the management team, investors and employees as soon as it's practical to do so. When drafting the business case, view the digital transformation from their perspective. How can it make their lives easier? Help the partners achieve the business strategy. Meet the financial targets for longevity. Step into the shoes of every stakeholder with whom this project will impact and create a vision that makes the future brighter and removes the pain of where they are right now.

Choose the right partner

• Review the options available, including what other law firms are using, and speak to them.
• What was their experience? What other advice would they give?
• Find a digital transformation partner you can trust.
• Take a look at the partner checklist

Assign a project manager

A dedicated resource is a must. One person should have overall responsibility for overseeing the day-to-day management of the project, working with internal stakeholders and the external provider. This makes keeping the project on track easier early if stakeholders understand that its success relies on their cooperation.

Define clear timelines

Don't do everything at once and avoid the critical times when you know resources will be spread thin. Phasing gives the project time to settle in stages and enables you to refine any minor issues before moving on to the next aspect, helping with user acceptance and adoption. Remember, your case and practice management solution is at the firm's heart and shouldn't be rushed to install.

Allow time for training

The best legal software is intuitive, and most suppliers have training resources that provide step-by-step guidance. This is all many employees need, but remember that some of the team may not be entirely comfortable with technology. Take baby steps. Get those who are tech-savvy to support those who aren't so confident. This can make it less scary. Once they get the hang of it, they'll never want to return to the old, manual way of working.

Realising ROI: The road to a more efficient law firm

No digital transformation would be deemed successful without achieving the return on investment that was set out at the start of the projects. That’s why it’s important to be clear upfront on exactly what you want from the final outcome – and to set a baseline so you can measure success.

Of course, you could base it on the payback period, internal rate of return or break-even analysis, but that doesn’t provide the full picture. It is also important to consider the wider benefits that a digital transformation project brings, such as a reduction in cost per case  or increase in billing per case, improving efficiency and introduction of automation. These usually compound over time as new processes and functionality are introduced, and the firm continues to make incremental improvements.