In the past decade, as our habits have been completely overturned by newer and more affordable technology and the way we approach work has shifted following big societal changes, many industries have seen their fundamentals shaken.
Companies have had to rethink the way they do business to the roots to survive, and many new players have leveraged emerging trends to pose a serious threat to incumbents.
The legal industry is no exception. Globally, the legal services industry was worth $849 billion in 2017 and is expected to become a trillion-dollar industry by 2021, per Statista. It is an immense sector of the economy and it’s growing. Nonetheless, law firms have faced, and continue to face, challenges that cannot be underestimated.
More intense scrutiny by clients, whose expectations have changed and are now demanding more transparency and communication.
Decreased prices of products and services offered, which makes it more difficult to deliver top and bottom-line growth.
Additional complexity of legal matters, now involving multiple stakeholders and required to deliver more value with less resources.
A changed workforce that no longer tolerates having to spend their working days with paper and manual processes and demands instead to be challenged with interesting and relevant tasks.
Increased reputation risk to have data and sensitive information stolen or compromised. Most in the industry think of data leaks in terms of when, rather than if.
Within the same timeframe, M-Files has worked with companies in the legal sector to implement new ways to manage information that could fit with their changing needs.
In the next pages, we will present five key learnings about how information management can help law firms address the challenges above and how it can prepare the industry for even more change over the coming years.
Enhancing The Customer Experience
In a world where people can find most answers on the internet, the need for specialized knowledge is jeopardized.
This is particularly true in the legal industry. Twenty years ago, big law firms could leverage specific and secretive expertise to win clients; now this is no longer possible. Knowledge is spread everywhere, and is used by boutique firms, purpose-driven consultancies, and internal strategy departments to help companies with their challenges.
Clients’ expectations are also changing. Clients now want to know what is happening with cases in real time; a Deltek survey found that almost 40% of managers at professional services firms feel the pressure to be always-on.
To differentiate themselves, law firms are putting the client at the centre of their offering. They are doing this by focusing on two areas:
Eliminating obstacles that prevent personnel from serving the client best. Making information about clients and cases accessible when they are needed, to make better decisions and avoid the duplication of documents and requests.
Reducing friction and costs to focus on delivering positive outcomes. Throughout the client lifecycle, many processes are transformed from manual and paper intensive to automatic and digital, ensuring that personnel can focus on high value tasks.
A solid information management system can prove to be the cornerstone of the relationship between law firms and their clients.
The Role of Information Management
Where is the latest case information for that client? Has it been reviewed already? Is this the most recent version of our contract? How much time will it take us to respond to them with the information required?
These (and many others) are questioning our legal clients were struggling to give a prompt answer to. It is not surprising that these are common questions lobbed around when documents are stored in different systems, exchanged via email, or archived on someone’s laptop.
When information management is done right, all information related to a client can be accessed when needed; it does not matter if the employee is working from home, at the office, at the clients’ location, or in court. A typical situation with archaic hierarchical network folder structures is one where more versions of the same document are available. That is confusing and it can be prevented, leaving personnel to spend their time more effectively. This is also valid for different matters related to a client engagement, past and present, so that better decisions can be made when consulting a client over an extended period.
Speaking of cases and matters, how each one of them is carried out represents a considerable portion of the client experience. A lot of the value a law firm delivers clients is wrapped up in documents. Information management can standardize how these documents are created and handled, ensuring that case documentation flows easily to all involved, without messy versioning issues. Delays and mistakes also make clients skittish about the relationship, and that’s why case information management is a crucial part of overall efficiency, safeguarding crucial steps in a case lifecycle using automation to ensure no step is overlooked and no detail is left behind.
Overall, information management can optimize how matters are set up, managed, and executed to meet client expectations.
This starts with the initial briefs that law firms painstakingly try to prepare on time and with precise information. Then there are contracts in their different stages: from drafting to revision, from signature to renewal. With a system in place that moves the document from person to person, collecting input and sending notifications the moment a new action is needed, matters get closed efficiently and personnel can start delivering value early. And when a case is closed, information management can support the finalization documents and closing the matter out, as well as archiving, securing, and retaining (or disposing of) all necessary information.
With information management protocols in place, at any time and for any reason, relevant staff can access all needed documents with a simple search and a couple of clicks, considerably reducing the time it takes to move from information gathering to action.
Imagine a situation where a client wants clarification on the status of a case. The client has wants reassurance that the correct processes have been followed and the case is moving in the right direction. What if you could get back to them with all the details in a matter of minutes, rather than days? This is what client experience for law firms looks like with intelligent information management.
It’s A Buyer’s Market!
As clients get a more central position in the offering, the price charged for services provided comes under increased scrutiny.
Nowadays, it is easy for clients of law firms to shop around in search of favourable and transparent pricing. It has also become common practice for clients to ask for help on a single case from a variety of firms, increasing the pressure on top line growth. Deltek found that 54% of COOs in professional services believe providing more value at the same cost is a key challenge for the future of their organizations.
The competition is fierce. New entrants can leverage technology to provide low-end, repeatable services, without worrying about legacy systems that can be cumbersome and difficult to integrate into more modern processes. At the same time, incumbents want to maintain their edge, and to do so, they need to perform a balancing act between:
Offering services at lower costs. Organizations are looking at their processes and procedures to optimize how resources are allocated and avoid waste, as value delivered cannot be decreased.
Maintaining good levels of profitability. As they commit to lowering operational costs, law firms also look for new ways to serve clients. They try to deepen existing expertise while simultaneously diversifying into other areas.
With information management, our legal customers are saving time and money, while making space for their employees to focus on higher value matters.
The Role of Information Management
The cost of having staff wasting time on tedious, manual work is way more than can be appreciated in a financial statement.
It is also visible in law offices where the amount of file cabinets exceeds the amount of employees, on desks that look more like a paper waste facility than a work station, and in personnel that have to wander around offices to find the right piece of information, often having to ask colleagues, whose workday gets disrupted as well.
With the aid of information management, law firms can re-examine how processes and procedures are currently carried out, automate what can be automated, and eventually reallocate resources (personnel, space, time) to high-value activities that better serve the client and provide better returns.
We have seen previously how information management can significantly help in accessing the right information in its most recent version at the right time, no matter where it is stored. This breaks down silos and improves efficiency. We have also described how companies can benefit from digitizing and automating processes related to clients, such as filings, contracts & close-outs.
But there are also other areas in which efficiency can be enhanced, and this is why law firms that benefit the most from information management are those who take a serious look at how things are done in different departments, and creatively implement the new system to rethink the principles behind key processes.
Accounts payable (AP) is a good example of how this can be put in practice. It often features different steps, that can easily add up to weeks. Invoices are printed out and delivered to the right person for review and approval. This often requires collecting further documents to make sure the invoice is correct, and possibly involving different people in the process. When done, invoices are sent back to the AP team for payment, hopefully by the due date. No wonder invoices are often lost in the process, or the due date simply goes by while some actions are still pending.
In a different area, employee training can also be cumbersome. Whether it is for new hires or current staff, companies must make sure that people go through the correct documents regarding procedures and best practices. They also need to keep track of all training certificates to be able to prove who knows what and when somebody is due for a refresher. All of this often means a lot of emails and calls.
Now, imagine how it would be to digitize and automate both accounts payable and training — the benefits that could be reaped in terms of time saved accessing information, employee satisfaction, paper-free work environment and office space availability.
This is how information management can enable law firms to reduce costs and find new, more valuable ways to serve their clients.
Casework Is More Complex
When a law firm gets hired, often an ad hoc team of contributors is assembled, and various casework tasks are kicked off. Being able to deliver positive outcomes is fundamental to the success of the firm and the satisfaction of its clients.
With clients more demanding and more careful about how they spend their money, legal teams are under increased pressure to continuously demonstrate how the engagement with their firm delivers favourable outcomes.
Casework is becoming more and more complex. Partly, this is due to the involvement of multiple stakeholders to address a certain issue — subcontractors, independents, experts, but also the clients themselves. Often the environment in which a case starts dramatically changes over time and staying on track can be complicated considering additional demands from the client.
Law firms that manage to provide reliable outcomes put significant effort in the following two areas:
They streamline and automate all case-related processes, particularly between different stages or milestones, to avoid getting stuck because somebody forgot to send an email or did not know about the most recent changes.
They facilitate access to documentation for all stakeholders involved, so that information can be accessed when needed in the most up to date form, even on-the-go.
Task management is not enough when it comes to case management. Documents are at the core of every matter, and effective information management is enabling our customers to maintain their reputation and keep their clients happy.
The Role of Information Management
When you have the best experts in your team, you do not want them to waste their time searching for information, or filling in the blanks in a contract template, or duplicating a document because they could not find the original one in network folders. These are inefficiencies that slow projects down, raise costs and eventually cause law firms lose business.
We have seen in the other sections how information management can automate repetitive, manual tasks such as data entry, casework documentation set-up, contract management, and more. With these things out of the way, law firm personnel can truly focus on delivering value to the client and improve business.
By bringing information together from different places and making it accessible in the most recent version — a clear goal for a third of firms, according to the Deltek survey — information management also enables legal teams to stay on top of what is happening at all times. This means, for example, being able to answer client’s requests promptly, and making relevant decisions in terms of scope should anything change in the case.
And finally, with powerful digital workflow capabilities, the different moving parts of matters can be tracked and automated to stop cases from getting stuck because of miscommunication. This often occurs when firms rely on people to send an email to update on the status and kick off the next phase, or when face-to-face meetings are the only way to stay in the loop.
Imagine how it would be instead if team members would get an automatic notification when their input is needed, add their value to the matter, and then click a button to fire up the next stage with no need to hand over information, as everything is available, when needed, in a single place.
This is how casework can be managed more effectively with information management.
Workforce Has Changed
Law firms are made of people. The services they provide are only as good as their workforce.
In the past decade, many things have changed in the way we all manage our personal and professional lives. Our expectations have shifted, particularly what we want from our job and our propensity for change. It was once normal to stay with a firm for most of a career, often working on trivial tasks. Today, we want work that is flexible, collaborative, temporary and highly technological.
Employees want to be challenged with relevant problems and new ways to address them. They want work that contributes to forming their identities.
Balancing the needs of older and younger generations presents a challenge. Law firms are committed on two fronts:
Identify and retain new talent. We have seen how reputation is important when it comes to repeat business with clients, but it is equally relevant when filling roles and open positions on the job market.
Ensure old and new employees stay. Having technology in the workplace is no good if it makes day-to-day work more complex, or if it does not become part of processes and routines because it is too complicated to use.
Our legal sector customers are on the path to a truly digital workplace with the implementation of information management.
The Role of Information Management
Nobody wants to be in a job where hours are spent looking for a document needed to carry out a simple task or having to go back and forth to colleagues and managers to get input on a contract.
Most of what we have seen regarding information management — securing information, enhancing the client experience, and generating significant time and cost savings — is also truly relevant when it comes to employee satisfaction and meeting expectations.
When there’s a system in place that enables staff to find a document with a simple search, collaborate with colleagues without having to be in the same physical office, and provide notifications when an action is needed, it’s easier to foster a work environment where people can focus on solving problems and delivering positive outcomes.
Information management can also be easy to implement and intuitive to use. Imagine if a new software could be deployed to a full department within weeks, even in a particularly stressful period of the year. And imagine if people could actually start using it right away, because they immediately understand how it works and the benefit, they can realize by making it part of their work routine.
This is how information management can make law firms a more appealing workplace for a modern workforce, while at the same time improving the days of those who have been with the company for some time.
Keeping Client Information Secure
Law firms handle an enormous volume of confidential client information.
From confidential case information to details about mergers and acquisitions, sales and marketing data, personal identification data and classified business communications; the documents containing this information are delicate. When they fall into the wrong hands, the bond of trust between the company and their client is broken.
A 2019 IBM report on data breaches points to two main sources of threat:
External — When a hacker attempts to gain access to information like personal identification numbers or credit card data, that they can then use to commit other types of fraud.
Internal — When employees accidentally email the wrong person with a sensitive attachment, or a disgruntled former staff member tries to take certain documents with them.
One way or another, the cost for the organization is extremely relevant, both in terms of client turnover — the same IBM report estimates lost business to be the biggest contributor to the whole cost of a data breach — and in terms of company image and reputation.
Working with law firms on this issue, we have found that a flexible information management environment can help address security requirements
The Role of Information Management
“Who needs access to what?” is a great place to start the conversation about how to better manage and secure client information. Law firms can greatly benefit from having systems and procedures in place to ensure that access to certain types of documents and information is only given to employees with relevant roles or in relevant groups at the right time. For example, if somebody’s input is needed when drafting a contract, there is no need for them to retain access to the document subsequently. With a similar logic, when staffers are promoted or leave the company, their access permissions should be modified accordingly and automatically.
The way documents are shared is another big piece of the information security puzzle. Law firms use emails and attachments widely to collaborate with colleagues and clients, and this is one of the biggest threats. Once an email is sent and a document shared, there is no control over who has accessed it, when, and what happens afterwards. Relying on information management means moving away from email attachments and into an environment that provides trackability of documents — as well as maintaining control and visibility on shared documents.
Flexibility in the choice between cloud or on-premises storage of information is another important factor. Cloud has some clear benefits — namely easy maintenance, fast scalability, and lack of upfront investment. And yet, whether to meet local regulations or clients’ expectations, law firms are often better off with a truly hybrid information management system, enabling them to choose quickly what information to store where.
Finally, with all this in place, it becomes easy to respond to audit requests. Imagine being able to prove, in just a few clicks, that you are following the most recent standards or that you are operating according to your client’s desires. Collecting the right information and evidence in minutes rather than days saves everybody a lot of time.
This is how information security for legal teams looks with intelligent information management.
The volume of documents and data any company is dealing with will only get bigger in the future. Law firms are no exception, and since time is their most valuable — and limited — resource, they need to make their wealth of information a facilitator of growth rather than an impediment.
We have worked with legal sector customers for over a decade, and we walk alongside them through the many changes the industry has experienced. In this whitepaper, we have shared things we have learned along the way and made the case that information management enables the modernization and digitalization of processes and procedures, delivering tangible improvements to both the top and bottom line.
It can make information easily accessible, while at the same time ensuring that control is retained across its full lifecycle. It can automate document-intensive processes, particularly those related to clients’ cases, so that no step gets delayed and deadlines are met. And it can enhance the workplace by cutting on paper and costs, making it possible for the staff to focus on things that really matter.
We know that information management, and M-Files, is the pathway to improved efficiency for law firms. And we want to close with two reasons why law firms consistently choose M-Files for their digital transformation.
Ease Of Implementation.
There is no need to move your files from where they are, M-Files fits with the way your employees are working and with the tools they are using. It’s also scalable, and that means that you can start with a pilot and then expand its use as you see fit.
M-Files is simple and easy to use, even for people who have no technology background. On top of that, our consultants and services are with you along the way, to make sure you can make the most of its implementation quickly.