The last 24 months of dramatic change driven by the global COVID-19 pandemic has placed a spotlight on key business outcomes and accelerated digital transformation in law firms. Each of these outcomes, coupled with how people and processes can be empowered digitally through the application of technologies, will be explored in this five-part series for firms. The series aims to provide insights into the five critical business outcomes:
- Understanding Your Customer
- Optimizing Your Business
- Innovating For Growth
- Enabling Your Workforce
- Protecting Your Business
Part 2: Optimizing Your Business
Optimizing your business is fundamental to driving unrivaled performance and profitable outcomes. Through digital transformation initiatives, law firms have an opportunity to drive impactful and lasting change that will elevate quality, enhance the employee and client experience, and stimulate growth.
The State of Optimization in Law Firms
Historically, law firms have limited time and resources on process enhancements and best practices, and invested more time on making impactful change by serving their clients and constituents. As the legal industry is traditionally focused on institutional knowledge, a culture of understanding and optimizing the current state of operations is not an area that is easily understood, since workflow and process are dynamic and fluid practices. Due to this, firms tend to avoid process optimization as a key business strategy.
Divergent processes often emerge when partners and key stakeholders hold different philosophies on what they feel adds value to the work being performed. A lack of operational rigor and defined best practices promote siloed and clustered teams where individuals gravitate toward working with one another based on stylistic preferences, rather than firm standards and best practices. Unfortunately, this results in significant inefficiencies and potential errors that increase a firm’s financial and operational risk, while chipping away at their growth.
Financial Risk
The aphorism, ‘time is money,’ has applications in every practice area of a firm. From client experience, engagement and transactions to documentation and billing – without defined best practices, firms alike are at great risk. Law firms are often more reliant on when and how their clients pay than most businesses. Inconsistent billing practices lead to errors, which can slow down payment and reduce client trust and satisfaction. Without consistent, rising cash flow, firms may have challenges covering expenses and growing their client base.
Organizational Risk
Documentation is at the foundation of a law firm’s working mechanics. Without standardized processes for organizing, securing and finding documentation, firms not only expend valuable time, but they also expose themselves and their clients to privacy risks as personal identifiable information or HIPAA data may be involuntarily shared. Likewise, hiring and onboarding new employees may be a cumbersome task for firms. Without process documentation or best practices in place, new hires are reliant on word-of-mouth and simple observation to determine which process streams to follow. A lack of documentation can lead to errors, repetitive tasks and sluggish performance.
Typically, technology can be the tipping point for impactful change during a digital transformation, yet law firms tend to be investment tactical in this area, often investing only when a critical need arises. There tends to be a low level of integration and strategy, thus resulting in a ‘patchwork quilt’ of technology. With no cohesive technology strategy, firms run the risk of redundant systems which lead to latency, errors and the potential of duplicate entries.
The Global State of Optimization
Like most industries, the pandemic accelerated digital transformation initiatives. Internationally, legal firms experienced heftier financial constraints as the pandemic evolved and motions like the great resignation, and political and social influences settled in marking their transformation initiatives six months to one year in advance of the U.S. legal market. Markets like Spain and Portugal started reinventing their processes early in 2021, focusing on process operations and optimization. The impact of the pandemic and aftermath of Brexit had a significant impact on the UK legal market, requiring firms to dig deep into subject matter expertise, practice areas, commercial acumen and sector knowledge. Given the turbulent landscape, successful international firms have turned to some combination of outsourcing, paralegal support, contract lawyers, process mapping, and process optimization and technology – all which require a clear understanding of current state operations and best practices.
Where To Start with Optimization
It is important to begin by understanding your current state of operations from a holistic view both client-facing and back-office tasks. What are the critical areas of practice? What processes are in place currently to serve those areas? What processes can be compartmentalized or automated? Which processes add value and support the firm’s mission? Having a thorough mapping of the current state and then designing a cohesive future state will provide your firm with a blueprint of your processes and best practices.
Once a firm has a solid mapping of their processes and best practices, technology can be reviewed to further advance transformation initiatives. Which technologies can be implemented to automate and streamline tasks? Technologies and legal platforms leverage artificial intelligence to remove inefficiencies and risk and provide insight into processes, data and workflow. These platforms include case management and document management solutions, billing and client portals that allow firms to collaborate succinctly and securely, increasing quality and speed, and reducing the overall product cost.
Beyond the obvious benefits of digital transformation, mapping out your current and future state of operations, establishing a blueprint of best practices and adopting a tech-forward approach can help firms generate new leads, enhance quality, save time through automation and provide a client-centered experience.
About Cherry Bekaert Digital Advisory
Cherry Bekaert’s Digital Advisory team is comprised of strategists who have broad industry experience and keen business acumen. Utilizing an agile and flexible approach, we help examine what you want to achieve with a focus on people, process, technology and culture. We are here to help organizations manage risks, enable growth and support sustainable operations. Leveraging our strategic process, we help digitally enabled organizations – especially middle-market companies – do more with less. Cherry Bekaert stays on top of the latest technology trends, but we know that technology is not a one-size-fits-all solution. Cherry Bekaert is here to guide you on what technology makes sense to adopt as it pertains to delivering the highest value to your organization.
Articles from this series:
