According to the 2018 Aderant “Business of Law and Legal Technology Survey,” many law firms report that business is better than last year, and a small percentage report that business is “much better.” (Well, good for YOU guys!) It’s nice to feel like we’re truly turning a corner after many lean years.
However, as with any business, the legal industry faces many challenges. Respondents to the 2018 survey reported that these were their Top 5 Challenges:
1. Pricing Pressure
2. Cybersecurity
3. Operational Efficiency
4. Technology Adoption
5. Competition
You know what I see when I review that list? The perfect “to-do list” for technology training and education at your law firm! How might training drive solutions and improvements in each of those Top 5 challenge areas? Let’s break it down, shall we?
Pricing Pressure
Responses to the Aderant survey indicate that firms have a hard time moving from a billable hour to alternative fee agreements (AFAs) because, quite frankly, they don’t know what it costs to deliver their services. 60.1% of the survey’s respondents reported that they don’t know how to estimate how much time and effort a matter will require. Can you imagine any other type of company saying that they don’t know what their actual work product costs?
Why does this pricing problem persist? The Aderant survey suggests that it comes down to firms learning how to crunch the data that they already have access to, such as the cost for previous similar work, average hours per attorney, etc.
However, I would argue that profitable pricing is also difficult because attorneys and their staffs have wildly different skill levels when it comes to using the tools at their disposal, such as document management systems, Microsoft and more. How can a firm arrive at a firm-wide cost to produce a legal matter when one legal secretary still uses WordPerfect, an attorney refuses to learn the firm’s document management system and a partner won’t allow his team to file documents electronically?
Training your entire firm to utilize the tools you’ve already made available to them delivers efficiencies and predictability, which makes the pricing process much more transparent. And then, with a deep look using tried-and-true business analytics and even Microsoft Power BI to analyze the data, you will have a much greater understanding of the micro-skills and nuances in every matter from which to appropriately price AFAs and respond to RFPs.
Cybersecurity
It’s no secret that security breaches are expensive. I recently wrote an article about the DLA Piper security breach, which experts predict may have cost the firm $2.25 million just on IT labor alone. The number-one way that hackers infiltrate your networks is through email phishing and spear phishing campaigns, and the only way to truly protect yourself from phishing is to teach your employees not to click on malicious emails through security awareness training.
Phishing is targeted at the basic human instinct of curiosity. Whether it’s an email that appears to be from the CEO offering us a raise, or a coupon from the nearby pizza chain, your employees need to recognize when something looks “phishy.”
The only way to protect that front door is through ongoing security awareness trainings. Note that word: “ongoing.” We all know that if you need to change a habit, you need to get your messaging in front of people on a regular basis. It’s easy to say, “think before you click” but much harder in practice and during the work everyone is juggling all day long; it takes practice! Additionally, since criminals are constantly changing their tactics, you need a security awareness training program that constantly monitors the dark underbelly of cybercrime and creates trainings to protect your firm.
Luckily, security awareness training is affordable. (Recovering from ransomware is not.)
Operational Efficiency
This term, “Operational Efficiency,” sounds like a kitchen junk drawer where a firm can throw all of the operational issues that plague its productivity: poor communication, mysterious reporting structures, slow billing processes, technological incompetency, and more. (Send me your favorites!)
My favorite is technological incompetency. Similar to the examples I shared earlier (legal secretaries on WordPerfect, attorneys who refuse to embrace the tech tools at the firm), tech incompetency has the potential to drag down every other process at your firm. One attorney who doesn’t understand how to make his own table of contents or footnote or index (functions that he needs to achieve every single day) causes his entire team to work at his (snail’s) pace.
Ongoing training is the most affordable, sustainable and impactful way to address some of your firm’s most nagging operational efficiency issues. By teaching everyone to use the tech tools at their disposal (tools, by the way, that you invested heavily in), you enable your team to work with the efficiency of a bee hive…
Technology Adoption
Hoo-Wah! As you can probably tell, I believe technology adoption is one of the biggest challenges that a law firm faces. But I also think it’s one of the most easily (and affordably) solved. Yes, the answer is training.
I recently wrote an article about how one law firm turned technology adoption into a priority, and the results were swift and impactful:
- Calls to the help desk decreased by 75%
- Staff and attorneys went from 30% technology proficiency to 60% and even 90% proficiency
If that doesn’t scream “improved operational efficiency” and “bottom-line boost” to you, I don’t know what does.
Competition
I bet you’re thinking, “How in the world is Doug going to link tech training to improved competitive advantage?” My friend, I’ve been making this connection for years. When your firm can prove that everyone working on a matter has maintained tech competency through trainings, that you’ve created internal benchmarks and requirements for technology adoption and/or that your attorneys are certified by LTA, you can use that information in every RFP and marketing piece you create.
In fact, clients are now starting to ask in the RFP process whether tech training and certification are required at firms and what levels of competency you’ve achieved. Trust me, if you make the affordable investment in training-up your team, you will recognize a competitive advantage.
Let’s Review
The Aderant survey found that these are the Top 5 Challenges faced by law firms:
1. Pricing Pressure
2. Cybersecurity
3. Operational Efficiency
4. Technology Adoption
5. Competition
I have just proven that technology training can be a change-maker in each and every one of these challenges. Are you interested in learning how? Contact me today! Doug@SavvyTraining.com, 303-800-5408