Rethinking your firm’s tech strategy: Uninterrupted productivity with cloud-based services
Law firms have hotly debated how best to drive productivity, deliver maximum value to clients in the most efficient manner, and improve the bottom line for some time. However, this year more than ever, the issue has taken on even greater significance.
After a standout financial year in 2021, growing geopolitical and economic turbulence in 2022 caused a significant decline in transactional work, while headcount and hiring remained high, hitting both productivity and profits. According to the Thomson Reuters Institute Law Firm Financial Index (LFFI), productivity fell 7% in Q4 of 2022 compared with the same quarter the previous year.
Today, despite the LFFI showing some bright spots on the horizon, the challenges remain acute. As law firms navigate a global economic downturn of uncertain depth and duration, where inflation and interest rates remain high, several other factors feed into this ongoing macro-instability. These include talent acquisition and retention considerations, constant adjustments to working practices, and the impacts of ongoing market segmentation.
In such an environment, the solution is not to simply hope for the best but to take action to find ways to help boost your firm’s productivity. If it wasn’t already your priority, it might be time to rethink your firm’s tech strategy and reevaluate your tech stack — particularly to consider expanding your investments in technologies like the cloud.
In this white paper, we explore how cloud-based services for law firms enable continuous productivity. We demonstrate why the cloud is no longer simply “nice to have”; it is essential to law firm competitiveness and success. We will focus on some key productivity considerations firms should include in their strategic planning and how legal tech — specifically a comprehensive cloud-based financial and practice management solution — plays a critical role.
The marriage of tech and productivity
Productivity is all about doing a good job faster, increasing lawyers’ effectiveness while keeping operational costs contained, and enabling them to do more in less time. While it may be possible to generate some efficiency gains by tinkering with day-to-day working practices in the general office environment, it can be hard to make a significant difference that way. A radical shift in how lawyers do their work and how law firms manage their practices is needed to maximize all the potential efficiency gains.
Typically, that requires technology that can eliminate unnecessary manual processes, automate them where possible to streamline workflows, and deliver valuable insights via real-time data analytics while creating visibility over matters. The technology also needs to make collaboration with colleagues and clients easier and enable lawyers to respond to questions or issues faster, facilitate secure 24/7 access to files and data from anywhere, and integrate easily with other systems and third-party technologies, just to name a few. Increasingly, that means cloud-based technology.
Benefits of the cloud
There are many advantages of moving to the cloud that all touch, in some way, on productivity: safeguarding business continuity, reducing service and maintenance requirements, enhancing the security of sensitive firm and client data, and streamlining how people can work remotely.
The pandemic starkly demonstrated the importance of keeping people securely connected no matter where they work. To ensure secure access to everything lawyers and other law firm staff need to do their jobs — wherever they are and whenever they want — the solution, in most cases, is to host systems in the cloud.
In the early stages of cloud computing, security was often a concern. However, today’s cloud solutions offer vastly improved security and frequently form a crucial part of organizations’ cybersecurity measures. Given the increasing reports of ransomware attacks on law firms, the security of the cloud offers the superior level of protection that firms need — and that clients demand.
Support and hardware costs
By decreasing the space needed to house servers on-premises — and the support requirements that come with them — firms can save considerable time and money using the cloud, reducing their reliance on in-house resources. In addition, firms can add new software, roll out updates, and troubleshoot issues more efficiently and seamlessly via the cloud compared to an on-premises network.
Perhaps one of the most attractive benefits of a cloud-based solution is its scalability. The move to the cloud does not need to happen all at once. Firms can prioritize their most important functions and choose which ones to move to the cloud first. The ability to take a more modular approach to building a cloud-based solution makes it much easier to budget, plan rollouts, minimize disruption, and ensure complete adoption.
Collaboration and communication
With information for all aspects of the firm’s business on a single platform, all contributors to a matter have equal and immediate access to everything they need to keep the entire workflow moving. Whether you need to work on a shared document with other people on your litigation team, work with a client on document preparation and review, or connect with someone in accounting about a billing question, it can all be done via the cloud.
Why the cloud? Insights for law firm leaders at every level
When it comes to finding ways to maintain productivity across the entire firm, it is hard to find fault in a comprehensive cloud-based solution. No matter what type of work you handle for the firm, there are cloud-based tools to accommodate it. The cloud can positively impact your firm’s business at any level, regardless of which part of the business you focus on.
Firm business leaders
When leadership considers any proposed tech investment, cost can be the primary concern. Frequently coming in a close second is how it will improve the delivery of legal services to clients. Can it help to improve efficiency? Can it contribute to increased productivity and profitability? Can it help the firm meet or exceed clients’ increasing demands? By equipping people throughout the firm with a comprehensive cloud-based solution, leaders can ensure that the answer will be “yes” to all those questions.
Perhaps one of the most significant advantages of the cloud is that it can provide connectivity across the entire firm. There are comprehensive financial solutions designed specifically for law firms that allow finance professionals to track every facet of a firm’s business easily and quickly — from collections and accounts payable to time tracking and data management — all delivered through a consistent and intuitive user experience.
IT leaders’ roles go far beyond addressing the day-to-day technology needs of the firm. They must constantly monitor where the firm is regarding practice areas, office locations, firm growth, and other considerations. Running a firm’s entire tech stack from a single, remotely accessible platform can make managing technology much easier, including troubleshooting, upgrades, and rollouts. In addition, the scalability of a cloud-based solution completely streamlines the process of managing the firm’s tech stack.
Lawyers are evaluated primarily on their billed time. So, minimizing the time they spend on administrative tasks is critical to their productivity and the firm's profitability. Cloud-based solutions that provide immediate access to reliable, current information allow lawyers to get the answers they need, complete the task at hand, and get on with other work without delay.
The COVID-19 pandemic is perhaps history’s most compelling use case for a move to the cloud. Many firms rose to the challenge when they were thrust into the unknown at the beginning of the pandemic. At that time, there was no playbook they could use and no precedent they could refer to for help developing a plan. The vast majority were left to find a solution on their own and they found that having the right technology in place was critical to keeping business operations running smoothly.
Warren Hua is a member of the management committee in charge of IT at JunHe LLP. He works in the firm’s Beijing head office, and he saw firsthand the impact of the pandemic on the legal profession and the strategies that helped get his firm through it all. As Hua explained, “Having a good IT system has been the lifeblood of our firm.” The firm uses a combination of cloud- and web-based solutions to ensure that staff members can stay connected and access the technology they need to complete their work.
How a cloud-based financial and practice management solution supports the key pillars of your firm’s business
If you’re still thinking that all of this sounds like a nice-to-have rather than a must-have, let’s take a closer look at some of the key elements of your firm’s business and how a cloud-based solution can help support each of these pillars to deliver tangible benefits.
When a prospective client comes your way, knowing whether the new relationship could conflict with any current clients is essential. From both a business and a client-service perspective, you want a quick and accurate answer to that question. There are solutions on the market designed to streamline the client intake and review process, but you’ll only get the benefits if you can access the solutions when and where you need them. 3E — the first cloud-native financial and practice management solution from Thomson Reuters — provides robust search capabilities that help you identify potential risks so you can protect your firm’s interests and those of your clients.
Clients keep a close eye on the costs they incur over the course of a matter. When they have questions about invoices, budgets, and other related issues, it is essential that all stakeholders have access to timely and accurate information with which to respond. A comprehensive cloud-based solution can provide easy access to everything you need. The intuitive interface of 3E makes it easy to find the information you need in no time to answer any client query confidently.
Time and billing
Streamlining your firm’s time and billing functions increases efficiency and improves profitability. A cloud-based time and billing solution allows timekeepers to enter time from anywhere — even from a smartphone or tablet. Cloud-based billing functionality facilitates smoother invoicing, shortening the proforma review process and the work-to-pay cycle. All of this is accomplished with greater accuracy and immediate visibility to other stakeholders. Some time and billing solutions reside on disparate systems; with 3E, you can manage all your firm’s time and billing functions — and much more — in one place.
Of all the tools law firms have at their disposal to drive business, their data may be the most important. The ability to glean actionable insights from their data helps firms spot trends that could impact the business and adjust course as needed. On the business development side, persona-based analytics can help to inform strategies for establishing relationships with new clients and enhancing relationships with existing ones. The data insights tools in 3E help you inform strategic decisions that protect your firm's financial health.
Four key considerations as you advocate for your firm’s move to the cloud
If law firm decision-makers remain hesitant after all these arguments, reinforcing the broader business case should convince them. Here are four talking points to help you strengthen the case for investing in a cloud-based solution.
1. What is the cost of maintaining an on-premise solution versus a cloud-based option?
Firms that use on-premises financial and practice management systems store everything on physical servers, which require regular maintenance and periodic replacement. More storage space is also needed as the firm grows, requiring the purchase of additional servers or server space. With a cloud-based solution, all the requirements of maintaining a physical network are removed, which saves the firm money and frees up its IT professionals to focus on more important priorities.
2. Make change as easy as possible
If there is one constant that comes with launching and implementing new technology, it’s the discomfort of change. Many versions of on-premises upgrades feel more like a completely new launch that often comes with a full complement of bugs, relearning, and related disruptions. Enhancements to cloud-based solutions tend to come in smaller, more manageable packages that are easier for users to understand and implement. This approach is much less disruptive and helps keep people focused on the job at hand and not distracted by the change.
3. Get a solution you can configure to your needs
With the implementation of any new tech solution, there are always a couple of key features missing from the provider’s standard offering. When implementing an on-premises solution, customization can dramatically increase the implementation timeline and quickly become expensive. Cloud-based solutions are configurable, meaning there are pre-programmed modules you can choose to add without going through the time and expense of a standard customization.
4. Get the same level of performance compared to on-premises solutions
There has been an ongoing discussion at firms evaluating cloud-based solutions about whether they perform as well as on-premise options. In short, there is no difference in performance if you have a reliable internet connection. Add in the benefits associated with decreased overhead and maintenance costs and anytime, anywhere accessibility, scalability, and security, and the case for a move to the cloud almost sells itself.
The first steps
With the extensive capabilities available via the cloud, it can be difficult to know where to start in the process of finding the right solution. While every firm’s situation will be different, a good starting point might be to find the gaps in your current capabilities. For example, what critical functions can the firm not currently perform remotely? Where is there the greatest scope for efficiency savings or process enhancements? Where can technology help add value to clients and enhance firm profitability?
Consider the key pillars of your practice discussed earlier, as well as all other functions deemed essential to the firm's day-to-day operation. Make a list of the tasks you need to perform and rank them red, yellow, or green to indicate how essential they are, keeping the need for efficiency front of mind:
- Red: Fundamental to firm operations and success
- Yellow: A high priority but not business critical
- Green: Nice to have
It is vital to involve a cross-functional team in this discussion to ensure that all sections of the firm have a voice and their needs are included in the assessment. Doing so ensures the right solution is selected to meet all the firm’s various requirements.
Now is the time
Given the recent productivity drop, many law firms will doubtlessly be under pressure to find efficiency gains wherever they reasonably can. The ability to streamline processes and workflows, remotely collaborate with clients and team members, securely access firm and client information from anywhere, and do it all from a single platform are high priorities as firms strive to do more with less.
Lawyers need to be freed from the burden of mundane, repetitive tasks so they can focus on high-value work. IT teams could put their resources to better use if they didn’t have to focus on the time-consuming and costly maintenance and servicing of on-premises systems. With constant visibility over all parts of the business, law firm leaders have the power to make better decisions faster.
Law firms can eliminate manual processes and increase efficiency with the embedded process models, automated workflows, pre-built templates, and real-time insights available with 3E, which Thomson Reuters built by leveraging 40+ years of working with more than 3,000 firms. Even better, firms can access all this uninterrupted productivity in the cloud.
Research from Gartner, Inc. indicates that, by 2025, more than 85% of enterprises will migrate entirely away from on-premises data centers to some type of cloud-based solution; forward-thinking law firms will almost certainly be among them. As part of a broader plan to change how firms function, the benefits of the cloud are numerous and undeniable.
Perhaps even more importantly, law firms’ clients will be among the organizations moving to the cloud. It has been well documented that clients expect their outside law firms to use technology at least as advanced as their own, helping them deliver legal work cost effectively. Firms that continue to treat the cloud as a nice-to-have could find themselves on the losing side of RFPs when competing for business.
After all the recent challenges, law firms still have much to contend with, but they can remain forward thinking through the uncertainty by expanding their investments in technologies like the cloud. Legal experts for the legal industry have designed 3E to allow firms to do more in less time in a secure, accessible cloud environment. It’s what we call being “3E productive.”
To learn about the difference a move to the cloud can make for your firm or to learn more about 3E, the legal industry’s first cloud-native software as a solution (SaaS) enterprise financial and practice management solution, contact a 3E representative to request a demo today.