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Technology and the 3 Ps: A Perspective

Posted by Randy Steere on Mar 8, 2016 12:00:00 PM

Technology and the 3 Ps: A Perspective

Some eight years ago when I first started to consult, create custom solutions and develop our BudgetManager product to help clients with what was then only described as "AFAs" (Alternative Fee Arrangements), I knew something was different about this need. The grassroots effort on the part of a few brave souls in a few brave law firms to "figure it out" and embrace what they perceived as a "new reality that was here to stay," started a pattern that one rarely sees in law firms: divergence rather than convergence.

In many law firms, the "herd mentality" has typically been the norm, as firms will often glom what someone else is doing and simply replicate it (the legal version of "keeping up with the Jones’"). In many areas this is still very true and one could argue that in the larger picture the entire movement toward "Pricing, Project Management and Process Improvement" is no different. But under the hood, especially for technology and process, the "3 Ps" are quite different.

Rather than improving and standardizing on the sets of phase and task codes, which the American Bar Association (ABA) tried to establish, each firm rebelled from the now useless set of published codes and started to develop their own. Some have thousands of codes, some have just a few and others code every time entry with two independent sets of codes to satisfy various needs! Indeed, I often see eBilling vendors who have managed to firmly wedge their way between firm and client demanding their own codes, which neither the firm nor the client want. Talk about technology gone awry!

The same holds true for pricing models and approaches to legal project management. Divergence is happening in all areas.

Of course, some of this divergence was expected because of the wide variety of practice areas and the wide variety of work habits among lawyers, not to mention the varying demands of in-house counsel. For all of these reasons, it's easy to predict that this divergence will continue unabated for quite some time, and it is my firm belief that it will be at least 10 years before new business models become as natural as the old hourly one. However, on top of all that is the fact that firms finally realize that they need to differentiate themselves from each other and that translates into creative, new ideas. The professionals that work on the three Ps, both within law firms as well as consultants and software vendors – myself included, are so busy trying to carve out their niche that they often bombard peers with contradictory advice. It’s important to remember that what works at one firm doesn't necessarily work at another.

I recognized this pattern early on and made a strategic decision that BudgetManager should be as flexible and powerful as possible, allowing each firm to blaze its unique trail to this new reality. As a consultant, I believe a wide variety of tools must be included in each firm's arsenal in order to accommodate very diverse needs and provide firms the ability to figure out their future.

From pricing analytics that quickly leverage historic records and turn them into useful information to widely different types of budgets that can model many possibilities, firms need tools that empower them to figure out their destiny.  Those firms doing legal project management need a variety of ways to incorporate projects into budgets and work out that relationship. 

Of course, with high functionality comes the risk of complexity and the need for each firm to invest the time and effort to figure out how it will work. Some are far more technologically savvy than others, and some lawyers and professionals are far more willing to negotiate the learning curve than others. Ultimately, this new reality is far too large and important to ignore.  

In my experience, I have found that it is vitally important for firms to be realistic about who has the ability and the time to perform each function along the way, and then match the technology used to that. Figuring out the mix of roles and assigning the right people to each role is about as important here as it is in deciding who will do the legal work. Professionals need to help each lawyer discover an approach that works for his or her situation and then create templates that can be leveraged by the lawyer over and over again. Constant guidance and involvement of pricing specialists to help lawyers over the learning curve remains a priority. Those willing to invest the time and effort will almost always succeed. And, of course, attending the P3 conference is a great way to continue the conversation and learn which way the trails continue to be blazed.

Randy SteereRandy Steere has three master's degrees in Music (Pipe Organ Performance), Divinity and Computer Sciences (earned in that order!). He was the IT director of a mid-sized firm for seven years before moving to Boston and starting his consulting career with Randy Steere LLC. He has consulted with hundreds of firms throughout the US, Canada, England and beyond on all aspects of law firm accounting, and is a former board member for the International Legal Technology Association (ILTA) .

Hear more from Steere at P3 – The Practice Innovation Conference, May 17–18, 2016, in Chicago.

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