How to reduce the cost of legal software

Category: Blog, Case Management, Guide, Practice Management 14th September 2022

SME law firms are, now more than ever, faced with the challenge to operate in a more cost-conscious way, but at the same time have pressures to increase salaries to retain talent and invest in legal technology to better service clients. This is why the expected value and return on investment needed from legal software solutions is higher than ever.

Our guide – how to reduce the cost of legal software – considers the current challenges faced by firms, the common reasons why technology projects don’t succeed and solutions to reducing the cost of legal tech. You’ll discover how to add value and achieve a financial return from your legal software investment, which will help to retain talent and run a more profitable operation long-term.

Current legal tech challenges facing UK law firms

With SRA fines for non-compliance rising, workloads -especially for conveyancing – increasing, and clients expecting an Amazon-style client service, the workload for legal professionals is increasingly causing burn out and overwhelm.

The promise of legal tech had firms believing they could rid themselves of manual and time-consuming tasks that meant spending longer hours in the office and improve the profitability of the tasks they carried out. However, it seems that firms are disappointed in the results of implementing these digital tools – 53% of firms believe tech isn’t driving efficiency and productivity to the level they expected, as reported by CTS & Legal Insider. Plus, in the latest Law Firm Financial Index, profit-per-lawyer fell 3.6% which is only increasing the need for legal tech to help firms operate in a more cost-conscious way.

So why are the digital tools and software solutions that promise time-saving features and process automation not translating into added value for law firms?

Why legal tech projects don’t succeed

There are two main reasons. First, tech is not seen as a priority or focus and second, there’s no clear strategy or communication for the wider team.

Digital projects aren’t a priority

If legal technology projects aren’t prioritised across the firm, then other priorities will always get in the way. Training is an essential part of the digital process and yet, it is often overlooked and therefore users never find the time to get started with the new tools. If there’s no time for training, then no one will feel confident using the software and the new processes are never implemented.

Without the project defined as a priority, no one is incentivised to adopt the software; no one is responsible for ensuring it’s utilised; and therefore no one is held accountable when it’s not a success. In the absence of accountability, the fault is pointed at the software and the costs for it no longer make commercial sense.

No communication of a clear implementation strategy 

You may be asking many people in your firm to change habits that have been embedded for years and so without clear communication on the goals for the new project, employees will feel reluctant to change and fear adopting something new.

A clear digital strategy needs to outline the goals, aims, and reasons for investment. The strategy can then be communicated to the wider team to help improve buy-in and adoption. If employees feel threatened as opposed to empowered by the software, ineffective habits will remain.

A digital strategy will also help to outline how to deal with unforeseen challenges that may occur. If the new tool doesn’t work in the way people initially expected, they’re more likely to turn back to old processes to get the work done. But a clear plan will outline what’s expected to ensure the invest is best utilised for the benefit of the employees, business, and clients.

How to reduce the cost of legal software

There are five ways your law firm can ensure successful adoption and utilisation of legal technology, so that you maximise value from your solution and reduce costs.

1. Have a clear operational strategy

If it’s not clear what you want to achieve and the plan to get there, it’ll be impossible to communicate you goals and ideas to the team. Ensure leadership are clear on what, why, who, and how of running your firm. When this is documented and discussed it’ll become easier to implement change because it’ll align with the overall purpose. The strategy will also help you make decisions on what is best to invest in, how it should be implemented, and what should happen if things don’t work out first time. Without a plan or reason why, people will fallback to ‘easy’ or ‘the way we’ve always done it’ which is not usually the most effective option.

2. Embed innovation into your culture

Without the expectation or belief in continuous improvement, the team won’t strive for it and instead settle for comfort. A firm’s culture is how you do what you do – it defines the decisions you make and so ultimately the success of the business. So, without innovation embedded in the culture it won’t be expected, incentivised, or prioritised. To embed continuous improvement into a culture it means to focus on iteration rather than perfection, it promotes experimentation and sharing of ideas, and it avoids blame and turns ‘failure’ into valuable lessons. Crucially, culture comes from the top and it needs consistent leadership signals and actions that reflect the culture you’re trying to create to ensure it filters and is replicated throughout the team.

3. Define metrics for success

How will you know when you’re successful without quantitative metrics to track? When choosing to invest in a new software solution or digital tool, ensure you’re clear on what you want it to achieve and assign metrics that can be tracked over time. This will not only provide you with a direction to move in but ensure you can track and celebrate progress or course-correct if it’s off track. This will help motivate an innovative mindset because your team know the goal they’re working towards, which makes it clearer to understand how to get there.  

4. Assign responsibility to improve accountability

Ensure the software project (it’s implementation but also ongoing success) is the responsibility of someone in the firm – ideally a legal operations manager. Without someone responsible for the success of the project, there’s no one accountable if it isn’t utilised or providing value. Ultimately, the success of the project is everyone’s responsibility, which is why an innovation culture should be encouraged, and trackable metrics are needed to ensure everyone is participating in the software’s success. This will avoid individuals deviating back to old processes if their performance is measured through the success of the software.

5. Invest in a tech partner for support and guidance

Bridging the gap between your people, processes, and tech is what will ultimately lead to reducing the cost of your legal tech. Having a supportive software partner will help make this easier as they can provide the expertise and advice on using the system for your firm’s needs effectively. The quality of partner is just as important as the product itself and the accessibility of support and training will enable your firm to get the most from the system and maximise return on investment. Always consider the support and training services that are available with your next technology investment.

The cost of legal software

Below is an example of the cost of an all-in-one legal accounts, practice management, and case management software and its initial financial potential to highlight the impact the solution can have on your firm when it’s a core element of your operational strategy.

Cost of software for 1 user per month = £100

Average billable rate for solicitor = £180

Currently lawyers are spending an average of 20% of their day on admin tasks. When utilised correctly, software can help to half that, and as a minimum saving you at least 3.5 hours a week.

Over a month that’s 14 hours which equals £2,520 per person, per month.

Minus the software costs that’s a saving of £2,420.

This is brilliant for your law firm, and you notice this difference almost immediately, but over time – when these new practices become the norm – the value gained is neutralised. This is why innovation is important, because you have to continually improve your processes, and continue to utilise more of the software to continue to save time and money.

However, it’s important to also track a variety of metrics to measure success to gain visibility of the long-term value gained across the business. Metrics to measure include client satisfaction, response times, employee wellbeing, adaptability to challenges, risk management, business continuity, and much more.

The impact of continuous improvement: British Cycling

Until early 2000, the British Cycling team had only won one gold medal in over 100 years. With the dedicated work of Dave Brailsford, who took over as the Performance Director of British cycling in 2003, the team went on to dominate world cycling from 2008 – breaking Olympic and world records.

The strategy of Dave Brailsford was to focus on the 1% gains, “if you break down every little aspect of cycling and improve each by 1%, the final result would be significantly different.” And the results spoke for themselves. In 2008, British cycling won eight gold medals and in the following 2012 Olympics, when no other country could achieve more than one gold medal, British cycling won eight again.

The secret to his success was continuing to look for incremental gains, even if the results of performance were yet to be realised. It took a few years for the performance gains to be visible, but Brailsford left no stone unturned when looking to optimise performance.

Often people tend to focus on big changes for large gains and ignore the small amendments that produce impactful results over time. Brailsford said “forget about perfection; focus on progression and compound the improvement. They’re tiny things but if you clump them together, they make a big difference.”

Calculating the true value of legal tech

It’s important to consider, and then measure and track, the full depth of value received from implementing legal software and weigh that impact up against the initial and ongoing investment. No matter what software solution, digital tool, or skilled professional you hire, the investment requires resources to help grow and improve. Choose a software solution and partner that will provide the answers to your current challenges, but also one that will grow and scale with you and help you to run a successful business long-term.

Making your digital operational strategy a priority

Prioritising your software utilisation and digital strategy is always going to be the answer to reducing the cost of your legal software. Because no matter what solution you buy, if your team aren’t using it effectively, then you’ll never reap the rewards, and the associated costs of the system will appear too high.

We know that’s easier said than done because legal professionals are starved of time and time is necessary for prioritising the software. Here are six tips to help you find the time to prioritise tech.

  • Get everyone involved in the project early on so more people can contributes minutes of their time to progress the project, rather than one person dedicating hours.
  • Hold regular company meetings about your operational strategy and the role tech plays in that to highlight the importance of the project
  • Reconsider your costing model to remove the connection between minutes and billable time
  • Ensure individuals are effectively delegating to free up time for those needed to start implementing change
  • Remove the pressures of perfection and turn failures into learnings to enable employees to experiment and try without fear
  • Lean on your software partner to provide you with best practices and new ideas for effectively using tech to meet your goals. Avoid wasting time waiting for answers and ensure you can get your support questions answered quickly.