Above and Beyond KM

What do lawyers and prisoners have in common?  They share a fixation on time.  Both groups are expected to spend a certain amount of time — whether it be expressed as target billable hours or as sentencing guidelines.  However, there is a noteworthy distinction between the groups:  prisoners get time off for good behavior.

While this may be an unnecessarily dramatic way to think about our relationship with time, think about it we must.  For the last few decades, the billable hour has been the gold standard against we measure a lawyer’s work and worth.  The problem is that a fixation on time can get in the way of thinking creatively about how lawyers (and law firms) actually provide value to clients.  Increasing numbers of clients are unwilling to pay just to keep us around.  They pay us to achieve specific results.

As clients and lawyers think more creatively about alternative fee arrangements, we’re all going to have to reconsider our dependence on the gold standard of time.  Perhaps in the process lawyers will free themselves from the need to do time.

[Photo Credit:  Matti Mattila]

If you’ve read Alternative Billing Alternatives and Update on Alternative Billing, you now know that the panelists on ILTA’s Using Technology to Manage Costs, Increase Profitability and Support Billable Hour Alternatives session believe that bare discounts are going to have a negative effect on a law firm’s profitability unless that firm significantly trims its costs of delivering legal services. The key to this is knowing exactly what products and services a firm offers, how it produces them and what discrete components of those products and services could be provided more cost effectively.  While the panelists cautioned us that there was no single “killer technology” that could manage costs and increase profitability, there are several available tools that go a long way towards helping a firm realize that goal.

The first, and perhaps most important, category of tools will help a firm do the fundamental financial analysis that is necessary in order to understand exactly what it costs to deliver services and how to reduce those costs.  Here are some financial technologies mentioned by the panelists:

• Fee estimation (Redwood Analytics, Satori)
  • Helps the firm realistically estimate its costs so that it can bid responsibly.

• Profitability analysis reflecting new business model (Redwood, Satori, Elite 3e)
  • Helps ensure that proposed practice area or bid is consistent with the firm’s profit goals.

• Resource Management (viEval, Redwood)
  • Helps allocate work to fee earners in a manner that maximizes overall utilization, efficiency, quality, training and professional goals.

• Task-based billing (Redwood, Satori, Elite)
  • Helps measure the firm’s cost of completing defined tasks, rather than entire matters.  This is useful for bidding and tracking costs.

• Matter Management (Redwood)
  • Helps track the firm’s actual matter costs against budget.

The panel then identified key practice and KM technologies.  While all of these tools provide useful functionality, one panelist opined that if he had to choose only one technology, his choice would be enterprise search since it allows you to reduce the cost of locating precedents, drafting documents, and identifying expertise.  The other high value category of tools is project management, which is critical when you’re trying to manage costs and client expectations.  That said, here is the long list of tools they identified :

• Expertise System
  • Recommind
  • ContactNet
  • BranchIT
  • SharePoint Knowledge Network

• Enterprise Search
  • Recommind
  • Autonomy/Universal Search
  • Microsoft FAST
  • Desktop Search (x1, Google, etc.)
• Work Product Retrieval
  • Real Practice Technologies
  • WestKM

• Project Management
  • Microsoft Project
  • Excel
  • Eclipse from Solution Q
  • Basecamp from 37signals

• Practice Portal
  • LawPort
  • SharePoint

• Document Assembly/Drafting Tools
  • HotDocs
  • DealBuilder
  • Exari
  • DealProof
  • KIIAC
  • Legal MacPac 10
  • Microsystems

• Collaboration
  • Blogs
  • Wikis
  • Threaded Discussions/Discussion Boards
  • RSS
  • Email
  • Extranets
  • Webinars

• Online Training
  • West Legal EdCenter
  • PLI Online

So there you have it — the experts’ guide to key technologies that can help you manage costs and enhance profitability.  Now, what are you going to do?

[Photo Credit:  pansonaut]