We all know that when it comes to hiring people, “if you pay peanuts, you get monkeys.” But what about when it comes to buying technology?
In a recent survey conducted by Appara about the State of Canadian Legaltech, eleven factors were identified as being important when law firms evaluate Legaltech, and cost was the third most-cited consideration, ranking just behind ease of use and features and functionality, but ahead of security, customer support, vendor reputation and reviews, and others.
In-house departments ranked cost as the second most important factor, barely ahead of ease of use.
I find this interesting, because both law firms and legal departments ranked the reduction of costs fairly highly in the list of goals that they want to achieve by adopting legal technology.
So lawyers buy software to reduce their costs, but don’t buy software because it costs too much.
I am left to speculate that the words of the playwright Titus Maccius Plautus who wrote sometime between 100 – 200 BC, have been lost on modern lawyers. He famously said that “you have to spend money to make money.”
Now, maybe legal technology simply costs too much and you cannot save money by using it, but my friends at Appara (albeit in a bit of a conflict of interest) have assured me that is not the problem, and when I see how many billable hours can be saved through the use of technology, I am inclined to believe them. Which leads me to my point, although admittedly in my usual long and meandering fashion.
The fact is that there are many reasons that lawyers sometimes avoid making decisions about adopting new technology. Here are just a few of them:
- lawyers are not famous for being quick to divert their attention from their file work to running their businesses;
- we sometimes hesitate to make investments with a view to maximizing long-term profits as opposed to short-term profits;
- some of us feel threatened by technology which may reduce our billable hours, especially if our compensation system is stuck on rewarding only time logged and billed; and
- occasionally we prioritize our personal situation over the firms’ situation and resist making expenditures which will not pay off during our tenure at the firm.
I could go on, but you get the idea. It’s complicated.
My suggestion? Law firms have to tackle these decisions in a holistic manner. While they have to make decisions which are best for the business, they also have to be attuned to considerations which might prevent their partners from maintaining that focus and figure out how to keep everyone on the same page. The answer is rarely going to be to make investments and let the compensation allocation chips fall where they may. In addition to making a business case for the firm as a whole, law firms also have to make a business case that will appeal to each partner and address their personal financial interests.
You can read the Appara report here: https://lnkd.in/eebRJTzW