By John W. Olmstead, Jr., MBA. Ph.D.
Copyright 1996-2002 by Olmstead & Associates. All Rights Reserved.
As law firms transition through the current decade it has become clear that many past business practices no longer work in today’s business environment. The billable hour is becoming obsolete and new forms of alternative billing are being embraced. Leverage ratios, expressed by the number of associate attorneys to partners, are dropping in many firms. Clients are refusing to pay for the education of inexperienced associates. Many would rather pay higher fees for more experienced attorneys. Consequently, many firms have reduced their recruitment of entry level associates and are looking for other ways to leverage their practice and improve profitability.
Increased external pressure from clients to increase efficiency and hold legal fees in check and internal pressure for improved leverage and profitability is forcing many firms to look “beyond the billable hour” for profit dollars. As firms review alternative billing approaches, the leveraging of work product becomes a key variable.
How many times has an attorney in your firm performed research or created a document just like work you prepare for a client? Probably more often than you think. This duplication of effort waste the attorney’s most important asset – time. It causes higher bills to clients, making you less competitive at a time when clients are demanding greater efficiency and lower fees.
As firms move away from the billable hour to value or alternative billing, such waste will undermine productivity and profitability. If your firm has, or soon will have, a computer network, document management software can help you manage and leverage your work product much more efficiently, saving you and your clients time and money.
The current state of work product storage and retrieval in many law firms is a mess. Many attorneys can’t even find documents and work product created by their own secretaries alone those created by others in the firm. Documents are scattered across that network as well as local PC hard drives. Client’s e-mail is stored in a different location – usually each user’s local c:drive and is often inaccessible to others. Such approaches to document and work product storage and retrieval results in attorney frustration and poor utilization of computer technology. In such cases attorneys often use their PCs as e-mail devices and nothing more resulting in constantly reinventing the wheel instead of leveraging the firm’s work product.
During the past 17 years we have helped firms design both manual and computer database systems that provide a centralized internal legal research and work product retrieval system. These systems relied on attorneys and paralegals to turn in copies of key documents with an index summary sheet to a responsible person for indexing and filing. For the most part, the systems failed; they simply took too much time and effort.
It became apparent that a successful system would:
Virtually all law firms are using word processing software to produce documents. Although in the past many of these documents were stored on standalone personal computers, law firms of all sizes are moving to personal computer networks for centralized document and file storage, electronic mail and calendaring, and case management. These networks make apparent the following limitations of word processing software for work product retrieval and general document and network management:
The frustration: In spite of the enormous investments that law firms have made in technology, lawyers and others are still unable to located documents on their office computer network unless they know the name of the computer folder in which the document is stored and the name of the document. After deciding how to name a document, users must decide how to group them for storage on the computer’s hard disk (e.g. f:documentjohnwills john smith brief). To name and later retrieve the document, you must specify both the folder and the document name, which can frustrate attorney and secretary alike. The central question becomes, “How will my secretary, as well as others in the firm, and I remember where the document is?”
The alternative is to use a full-text based document management system which works in conjunction with your existing word processing system. Don’t plan your computer network without also considering document management. Document management software packages provide the following features, among others:
While there are several products on the market that provide some document management features, there are fewer that provide complete document management features. Do not confuse these more limited packages with true full-text document management systems. Software packages that you may want to consider are:
Worldox fits well in small to medium/large firms while Docs Open and iManage play well in the largest firms.
By installing a personal computer network and adding full-text document management software, firms can make full use of their computer capabilities. Your investment will pay for itself in time saved and increased productivity and profitability.
John W. Olmstead, Jr., MBA, Ph.D. is a Certified Professional Consultant to Management and the president of Olmstead & Associates, Legal Management Consultants, based in St. Louis, Missouri. The firm provides organizational performance, management, leadership development and marketing advisory services to law and other professional service firms. Dr. Olmstead is the Editor-in-Chief of “The Lawyers Competitive Edge: The Journal of Law Office Economics and Management,” published by West Group. He also serves as a member of the Legal Marketing Association (LMA) Research Committee. Dr. Olmstead may be contacted via e-mail at email@example.com. Additional articles and information is available at the firm’s web site:www.olmsteadassoc.com