Enterprise v. Application: Are Firms Ready for an Enterprise Class Solution?

Article

In a changing marketplace, it might benefit law firms to choose an enterprise solution over ‘technology application gluttony.’

Mike Stern, Prosperoware, Legaltech News, 

Published on the LTN website here

As the demands for improved financial performance continue to increase for law firms, solutions—technology solutions, specifically—seem to be popping out of the woodwork, all making similar claims about achieving stellar results. Let’s disabuse a few of these notions, starting with the obvious point that not all technology solutions are created equally. That’s OK, of course, as it’s dependent upon what problems a firm is seeking to solve.

Unfortunately, though, some firms have fallen unwittingly into technology application gluttony and find themselves experiencing symptoms of integration overload. Some of these firms have implemented hundreds of applications, and it’s simply too much to manage.

This we know: Market forces (shrinking demand, growth in alternative legal services providers, more work moving in-house, etc.) and the imposition of budget discipline on law firm matter delivery has pushed firms into a different business model from the traditional approach of “do quality work, without regard to cost, then bill.”

What this means is that, today, some firms are seeking a new approach to competing for, identifying, and winning new business; to the staffing, ongoing financial management and real-time monitoring of matters; and a new approach to reporting on all of this to clients. In essence, it’s a new business model—one that can properly be managed via an enterprise class solution, not piecemeal integration of various individual or legacy applications.

What is an enterprise class solution?

For the most part, corporations tend to be about 10 years ahead of law firms when it comes to this kind of technology. An enterprise application, as Microsoft defines it, “is a big business application.” Or, a little more meaningfully, enterprise solutions are, “complex, scalable, distributed, component-based and mission-critical … and satisfy hundreds or thousands of separate requirements.” Microsoft breaks this down into three basic requirements for enterprise class solutions:

• Large: The platform is multiuser, multimachine and multicomponent, can manipulate massive data sets and utilize extensive parallel processing, network distributed resource and complex logic.

• Business-Oriented: Its purpose is to meet specific business requirements. It encodes business policies, processes, rules and entities, is developed in a business organization and is deployed in a manner responsive to business needs.

• Mission Critical: An enterprise application must be robust enough to sustain continuous operation. It must be extremely flexible for scalability and deployment and allow for efficient maintenance, monitoring and administration.

Why would a firm consider an enterprise class solution?

Fundamentally altering business models is a big deal and requires a “big” solution—one designed for the greater complexity and modern paradigm. Work that needs to be done includes:

• Stabilizing the firm with an appropriate mix of high- and low-profit margin practice groups;

• Shifting the compensation system to incorporate the variance of matter profit;

• Protecting the firm against disintermediation;

• Enabling client relationship partners to plan, monitor and bill according to agreed matter plans;

• Standardizing processes; and

• Leveraging alternative staffing opportunities and labor arbitrage.

Consider the mix of expertise and data that each of the above necessitates. If we assume that the above list constitutes the changes needed, then this new business model firms are transitioning to requires a mature mix of “front of house” timekeepers plus administrative teams, including pricing, marketing and business development, HR, finance and LPM practitioners. Gone in this model is any vestige of the old “us” vs. “them” mentality.

Firms already have access to and are aware of the tremendous volume of data and expertise residing in their various departments, yet they’ve struggled to sew it together into something greater than the sum of its parts. This sewing requires technology. In terms of solutions, there are specific applications for everything: BI/MI dashboards, proposal generation, firm directory, experience management, pricing, budgeting, profitability and forecasting.

Unfortunately, the more point solutions a firm has, the more challenged they are to integrate them properly, which can result in integration overload, instability and simply inaccurate or inconsistent metrics. With multiple applications to look after, firms stretch already limited resources to maintain numerous databases and data sources as well as manage that data. Worse, firms can end up losing the value of capturing and correlating that data as lawyers and administrators waste time fixing integration problems—or missing them altogether—rather than benefiting from integrated intelligence.

Configurable secures knowledge transfer

An enterprise solution’s worth is in including the built-in integration firms need to leverage the intelligence which they already have. As importantly, with enterprise software, firms benefit from a “configurable” platform—not just a series of “customizations.” That is, all the decisions regarding setup can be completed in the software’s user interface.

This means that, once it’s up and running, the technology is not solely dependent upon the expertise of a small handful of expensive consultants or administrative users; if it was reliant upon customization, when those experts left the firm, that expertise would go with them, and the solution would be left to languish. A true enterprise solution would provide true, transparent configuration, ensuring secure knowledge transfer.

Applications that require customized scripts and behind-the-scenes setup visible to only one or two people put the firm at risk for knowledge transfer. Customized platforms are often touted as flexible, but those highly-customized systems create problems beyond that of knowledge transfer. Highly-customized systems can become unsupportable and difficult to maintain. A simple upgrade to a newer version can wipe out all of a firm’s customizations or make upgrades effectively impossible to perform. Conversely, a truly configurable enterprise solution is typically every bit as flexible as a customized solution yet doesn’t carry the inherent risk and significant downside of obsolescence.

Compared with more siloed applications that require separate data entry and data capture and disparate interfaces, there are solutions that utilize a common interface, common data platform and integrated and coordinated workflow and processes across all firm functions and departments. The various functions in the firm all rely on and benefit from a broad, common set of data. Firms can ensure that the platform they select to address a need such as business development will also meet knowledge management, LPM and even lawyer requirements for both capability and information delivery.

By selecting modern systems designed to address the new paradigm and necessary business model to compete in today’s market, firms can gain beneficial synergies from that core system warehousing a single, unified version of the truth.

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