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Process enhancement key to firm survival

Process enhancement key to firm survival

Law firms may soon have little choice but to ramp up business process enhancement initiatives in order to meet the standards of other professions and prepare for an increasingly competitive…

Law firms may soon have little choice but to ramp up business process enhancement initiatives in order to meet the standards of other professions and prepare for an increasingly competitive market place, writes Angela Priestley

With DLA Piper's marriage to DLA Philips Fox officially passing the partnership vote this week and Clifford Chance announcing their move into the Australian market last month, the legal profession must not only respond to a range of trends emerging in the market - such as legal process outsourcing, the increasing power of general counsel and alternative fee arrangements - but also find space for a number of significant new players.

Competition in the sector is heating up. According to a number of panelists charged with operational and technology management in law firms at a recent Janders Dean breakfast seminar, such competition may just be the catalyst lawyers need to jump aboard business process enhancement initiatives in firms.

Problem is, lawyers are not always inclined to see the benefit of business process enhancement, especially if dealing with any required change interrupts their regular workflow.

"These are businesses that we're running and yet lawyers are not business people," said Janet Young, the chief operations officer at Freehills. "A lot of the processes we develop are actually to keep them happy and to ease their frustrations rather than to benefit the firm as a whole."

Given the term 'business process enhancement' refers to more than the simple automation of basic processes to encompass more high-value strategic returns for a law firm, the buy-in of partners and lawyers is essential to make any traction on introducing such enhancements.

But according to Gerard Neiditsch, the Chief Information Officer at Mallesons, the last couple of years have seen a shift in mentality for lawyers, which may aid in the implementation of process enhancement. "Lawyers are starting to push from the others side and are trying to become better project managers," he said. "I think clients and lawyers in law firms are both expecting things to change."

Neiditsch added that such expectations are being driven by the fact clients are starting to view the estimates they are being provided by law firms as fixed fees for a matter.

"If that is the case, then you'll need process and project managers because we'll have to do what other businesses have done for many years and that is to manage the scope [of a project], and the variations of the scope," he said.

Young said that with the necessity for process improvement materialising in the Australian market, her hope is that lawyers will progressively start to recognise just what it takes to run a business and get more interested in working with initiatives that can help.

She said it starts with operational managers communicating effectively with fee-earners. "There is a disconnect about what the word 'process' means, we need to change that before we can move forward," she said.

Gilbert & Tobin's CEO Michael Boot said at the seminar that it can be difficult to present the upside of business process enhancement to lawyers. "They [lawyers] are set in a routine, and we are tapping from the outside saying 'we want a behavioral change'," he said.

But by applying mechanisms to assist lawyers with their performance, Boot noted an ultimate upside: the end of timesheets.

The time-based pricing mechanisms used by large law firms, added Boot, are somewhat incompatible with a commitment to process enhancement initiatives, given that hourly billing is fundamentally an "unpolished" process.

Boot said lawyers need to start exploring pricing opportunities beyond hourly billing and focus on the value they can offer clients. But, he added, the successful estimate of fixed fees will need to be underpinned by processes, tools and models.

Ian Dunn, the managing director of BTP Australia which supported the event, said that business process enhancement in a law firm works best when it's underpinned by cultural change. "A culture that has elements of continuous change is essential," he said.

In closing the session, Justin North from Janders Dean questioned just how much of a motivator the fear of shifting market trends is for lawyers and partners to buy-into business process enhancement.

"From a business case point of view, this driver [fear] can be harnessed to move forward," he said.

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