Rarely do the stars align to find David
Maister, Richard
Susskind, and Kieran Flatt (Legal IT) all writing about
the same thing at the same time, but when it so happens the opportunity
to try to synthesize their thinking is too rich to pass up.
The common topic du jour is essentially the
payoff of IT investments in law firms: Do, in a nutshell, investments
in IT pan out positively in revenue and profitability growth?
Kieran is squarely in the skeptical camp:
"I for one have yet to see any sort of technology that
really does deliver a substantial competitive advantage to medium-sized
City practices. Turn the clock back a few years: some of the leading
firms had bugs, glitches, performance problems or stability issues
with their document management systems (DMSs). Most, if not all,
of these gremlins have now been sorted out, but for a long while
the affected firms had to carry on running older, less sophisticated
software — and they continued to make money at pretty much exactly
their usual rate."Rather than proving anything about the respective merits of the
various DMS platforms on the market, I would argue that this case
proves DMS is nowhere near as critical a resource as it is usually
made out to be."
He is not only a skeptic, he’s an IT Minimalist: "Only
three aspects of a firm’s IT function really are mission-critical.
You guessed it — the telephone and e-mail services and the billing
system."
To be sure, he readily admits that the Clifford Chance’s of the
world could not exist in their current form without sophisticated
globe-spanning IT infrastructures, but how many firms are in Clifford
Chance’s league? Here’s the dilemma he sees; firms have
essentially two choices. You could call the first the Clifford
Chance Model and the second the Wachtell model:
"Either get big and global, rely on good management and
innovative systems, commoditise much of your business and slash your
margins to compete — which gives the leaders of the IT department
a vital role in driving profitability and running the business — or
just focus on providing good support IT, keep costs to a minimum
and expectations low, and let the fee-earners and partners get on
with making the money."
In the course of his piece, Kieran refers to David Maister as "the
high priest of profitability," and tags David as a disciple of the
second alternative—empower the fee earners to make money and
get out of their way—and characterizes David’s view as one
that “focus[es]
almost exclusively on excellence …. with much less emphasis on
strategy, processes, technology and management structure than is
the norm.” Strategy and IT be damned, in other words.
David’s gentle rejoinder and "clarification" put the stress on actually changing
the behavior of professionals rather than on grand strategic
visions. And he exposes (some firms’) use of technology as
a smokescreen for avoiding the hard work of actually improving
the quality of human interactions, which are the only source of
sustainable and distinctive success in a professional services
firm.
"Too many places put in new tools so that the front-line
senior people won’t have to change what THEY do, – ie, they pass
the task of achieving competitive advantage on to the techies. Firms
have taken this approach for a long time – they would rather spend
money on low ROI activities than change personally. They did this
in marketing, always looking for something (branding, PR, brochures,
websites) that could be done by somebody else, so they (the front-line
senior professionals) wouldn’t have to change the way they dealt
with clients and customers."
Technology may be great in the hands of enthusiastic and energetic
people, but if the availability of sophisticated IT tools leads people
to the view that IT is primarily, or even substantially, responsible
for the firm’s success, you have taken your eye off the ball of your
professional offerings and your clients.
Richard Susskind squares
the circle by asking, "SHOULD lawyers be technology pioneers?", and
proposes three possible reactions of law firms when confronted with
(say) an encomium to the fabulous promise of wikis and blogs: They
can of course resist; they can prepare to take action; or they can
be pioneers and lead the way.
Richard notes the rigors of true pioneering: "Successful pioneering
in IT is not temporary pacemaking. It is about striving to keep ahead
of the pack and reaping substantial rewards as a result." It’s
not a one-off sprint, in other words, but an ongoing and sustained
distance race.
The question remains: Is it a race worth running?
You can also count Richard in the Scottish verdict ("not proven")
camp:
"It is not yet clear whether it pays for lawyers to innovate
in IT. Did great benefits accrue to firms that led the way, for instance,
in advanced financial systems, document management systems or in
human resource systems? Was the investment in the early bespoke systems
worth it or might it have been better to wait for off-the-shelf solutions?"
His true belief is that any system, no matter how well-crafted and
effective, that faces inward to benefit the way the firm works,
will never provide a competitive advantage. Only
systems that face outward to engage clients—and to make
those clients’ "switching costs" (to another firm) extremely high, will
provide sustainable competitive advantage.
I know of one firm that’s actually doing
this today.
So we have three luminaries converging on one tentative hypothesis: If
IT in law firms doesn’t:
- face towards clients;
- give practitioners tools they can use enthusiastically; and
- enable migration towards higher-quality, more effective personal
one-on-one interactions,
then it is not worth the candle.
