Assessing the Impact of Technology Trends on Legal Practice

The purpose of this article is to highlight the 2011 Top 10 Technology Issues identified by the American Institute of Certified Public Accountants (“AICPA”), based on its most recent annual survey, and to discuss how law firms and readers of Accounting and Financial Planning for Law Firms can benefit from an increased awareness of what the survey indicates. By way of background, identifying the top 10 technology issues is an initiative that the AICPA has been doing on an annual basis for roughly 22 years. Readers can access the full survey and its findings at www.aicpa.org.

I was fortunate enough for a couple years in the late 1990s to be part of the team of professionals who spend a significant amount of time together every year developing and vetting the compiled lists after many hundreds of hours of time identifying and surveying a wide group of stakeholders on their technology challenges.

There are ancillary categories specific to public accounting, a top 10 list for business and industry, and a top 10 list of emerging technologies, among others. It can also be noted that the lists actually extend well beyond the top 10 rankings with 41 items on the primary technology issue list for 2011, extending to issues such as deployment of tablets, outsourcing of IT support, data warehouses, videoconferencing and many more, so I encourage you to access and study this information. I cannot cover each one of the top 10 items for 2011 in depth, but will simply list them and offer some comments on how these issues relate to what lawyers do for a living.

AICPA 2011 Top 10 Technology Issues

1. Control and Use of Mobile Devices
2. Information Security
3. Data Retention Policies and Structure
4. Remote Access
5. Staff and Management Training
6. Process Documentation and Improvements
7. Saving and Making Money with Technology
8. Technology Cost Controls
9. Budget Processes
10. Project Management and Deployment of New Technology

I will focus attention in this discussion to a few of the items listed above, including:

• Control and Use of Mobile Devices;
• Information Security;
• Data Retention and Structure; and
• Saving and Making Money with Technology.

Let me first combine the first two issues, Control and Use of Mobile Devices and Information Security, with a challenge to everyone.

Have you sufficiently tested your backup protocols and fully considered where your key data are located? I know of a local Denver professional services firm that had someone, who apparently gained entry with the cleaning crew, come through its offices one evening a year or so ago taking about a dozen laptops that were not noticed as missing until the next day. The laptops were not backed up, and some had sensitive audit client information on them. Bam! Gone is a pile of sensitive client data and intellectual property; call your malpractice insurance carrier as well as your carrier for coverage for contents!

Balancing accessibility with information security is a continuing challenge as the experience of this firm highlights. I recently read a piece on how the addition of a very small amount of salt to the manufacture of memory chips has such an impact on how the electrons that keep track of the 1s and 0s line up that this simple innovation within the production process will increase the amount of data that can be stored roughly sixfold in the coming months. I only mention this as another example of how much data we will likely be carrying on our PDAs, iPads and other devices ahead, notwithstanding that the advent of cloud-based technology solutions may render this type of data storage obsolete in the coming months in many instances.

Sticking with that thought and with respect to the identified issue of Data Retention and Structure, we have just seen the launch of the iCloud by Apple, and many are predicting that 2012 will see many of the software and utility applications we and our clients use migrate to cloud-based solutions. A recent study that was highlighted at the College of Law Practice Management's 2011 Futures Conference at the Kent College of Law in Chicago noted that roughly 33% of law firms were moving to or considering cloud-based solutions for their technology plans. Decreasing concerns about secure, reliable Internet connections are a key driver in justifications for the cloud and all it appears to offer. I urge you to keep your eye on this and be accepting of the change in protocols it will require.

Before leaving the technology issues discussed at the 2011 Futures venue, I note one other comment that really caught my attention, among the many insightful things covered at this annual gathering of legal industry thought leaders. Law firms are using the Internet more and more to compete for business. One presenter made the comment that legal services access points, like Direct Law, are to law firms what Open Table is to restaurants. For those who have used Open Table to find and reserve a restaurant almost anywhere they travel in the United States, think about the consumers of our services now having that level of access to alternative providers for the more routine services attorneys provide. It should make you sit up and pay attention to how you market and brand your shop from an Internet-based point of view. Direct Law is by no means the only provider in this space, and do-it-yourself legal services are expected to approach a $1 billion market in the near term. Surf to www.colpm.org for more information on the Futures venue and the College of Law Practice Management, where I am honored to be a Fellow.

We are all in business to make a reasonable return on our investment of time and money, as well as on the risks we subject ourselves to every day we are open for business. Technology has long been touted as a way to increase efficiencies and profits, and we have been told this as part of the sales pitch for the new upgrade, new network, added monitors, Internet-based resource, and on and on and on. I am still not sure we will ever quite realize the enhanced efficiencies and profits we are promised, but I am confident in telling you that you must continue to embrace and invest in evolving technologies to stay competitive. This is more evident today than at any other point in my 30-plus years as a professional service provider.

Take-Away Points

In summary, here are just a few take away points:

Invest in cutting-edge, not bleeding-edge, technology and listen to the younger folks in your shop on their needs and preferences, as they are the future of our profession. The way I was taught to do things to be successful still works for me for the most part, but it might not work well for those who can type better or can concentrate better on information that is conveyed over the Internet. Just as a small example, our firm committed to two monitors for each professional a couple years ago and now we are seeing the justification for more than two when the individuals in front of them can use them efficiently. Providing employees with tech support for tablet-based applications is probably a better example of where we are today.

Identify who should be the champions within your practice to take the lead on assignable, technology-related aspects ' such as building and maintaining your electronic knowledge library ' or be the lead person on the use and application of certain resources such as searching databases, accessing online resources, or planning when and how to migrate applications to the cloud. It is probably not long before your firm's accounting, time and billing and library resources will all be maintained “in the cloud.”

Strive to find the balance necessary to maintain key relationships with staff, clients and referral sources when it is so darn easy to just fire off an e-mail to advance the ball. You might have the ball taken away from you when you do not also reach out when appropriate to communicate by telephone or invest the time needed to have that face-to-face contact. We all seem to be tethered to our Blackberries or iPhones, and I would challenge everyone to do without this wonderful resource for an extended period from time to time.

My wife and I took a three-week vacation outside the United States in January, and I purposely left my office e-mail behind. It was a bit like what it must be like at the summit of Mount Everest, as I found myself gasping for electronic air for the first few days but then felt very empowered to know that life goes on without having to check my e-mail every few minutes. I was reminded that customer service is not predicated on returning client e-mails instantly, as long as a protocol is in place to ensure customers' needs are adequately responded to by someone. I also must admit that I worked very hard to coordinate the opportunity to be “off the grid” for the most extended time I have ever done so, and I did this by having a great team supporting me, who “get it” in terms of their technology acumen.

Lastly, embrace the reality that Moore's Law, named after Gordon Moore the founder of Intel, remains in full bloom wherein he predicted that with the advent of transistors, computing power would double roughly once every 12 to 18 months. That prediction was made in 1965, and my sense is we ain't seen nothing yet. Technology impacts just about everything we do today professionally, but just don't let it get in the way of maintaining the balance in your life and the relationships that are most important to you.

Ron Seigneur is the managing partner of Seigneur Gustafson LLP, located in Lakewood, CO, where he focuses on a wide range of practice management solutions for professional service providers. Seigneur is a Fellow of the College of Law Practice Management and an adjunct professor at the University of Denver College of Law, where he teaches Applied Leadership and Management Theory for Law Firms. He can be reached at 303-980-1111 or [email protected].

The purpose of this article is to highlight the 2011 Top 10 Technology Issues identified by the American Institute of Certified Public Accountants (“AICPA”), based on its most recent annual survey, and to discuss how law firms and readers of Accounting and Financial Planning for Law Firms can benefit from an increased awareness of what the survey indicates. By way of background, identifying the top 10 technology issues is an initiative that the AICPA has been doing on an annual basis for roughly 22 years. Readers can access the full survey and its findings at www.aicpa.org.

I was fortunate enough for a couple years in the late 1990s to be part of the team of professionals who spend a significant amount of time together every year developing and vetting the compiled lists after many hundreds of hours of time identifying and surveying a wide group of stakeholders on their technology challenges.

There are ancillary categories specific to public accounting, a top 10 list for business and industry, and a top 10 list of emerging technologies, among others. It can also be noted that the lists actually extend well beyond the top 10 rankings with 41 items on the primary technology issue list for 2011, extending to issues such as deployment of tablets, outsourcing of IT support, data warehouses, videoconferencing and many more, so I encourage you to access and study this information. I cannot cover each one of the top 10 items for 2011 in depth, but will simply list them and offer some comments on how these issues relate to what lawyers do for a living.

AICPA 2011 Top 10 Technology Issues

1. Control and Use of Mobile Devices
2. Information Security
3. Data Retention Policies and Structure
4. Remote Access
5. Staff and Management Training
6. Process Documentation and Improvements
7. Saving and Making Money with Technology
8. Technology Cost Controls
9. Budget Processes
10. Project Management and Deployment of New Technology

I will focus attention in this discussion to a few of the items listed above, including:

• Control and Use of Mobile Devices;
• Information Security;
• Data Retention and Structure; and
• Saving and Making Money with Technology.

Let me first combine the first two issues, Control and Use of Mobile Devices and Information Security, with a challenge to everyone.

Have you sufficiently tested your backup protocols and fully considered where your key data are located? I know of a local Denver professional services firm that had someone, who apparently gained entry with the cleaning crew, come through its offices one evening a year or so ago taking about a dozen laptops that were not noticed as missing until the next day. The laptops were not backed up, and some had sensitive audit client information on them. Bam! Gone is a pile of sensitive client data and intellectual property; call your malpractice insurance carrier as well as your carrier for coverage for contents!

Balancing accessibility with information security is a continuing challenge as the experience of this firm highlights. I recently read a piece on how the addition of a very small amount of salt to the manufacture of memory chips has such an impact on how the electrons that keep track of the 1s and 0s line up that this simple innovation within the production process will increase the amount of data that can be stored roughly sixfold in the coming months. I only mention this as another example of how much data we will likely be carrying on our PDAs, iPads and other devices ahead, notwithstanding that the advent of cloud-based technology solutions may render this type of data storage obsolete in the coming months in many instances.

Sticking with that thought and with respect to the identified issue of Data Retention and Structure, we have just seen the launch of the iCloud by Apple, and many are predicting that 2012 will see many of the software and utility applications we and our clients use migrate to cloud-based solutions. A recent study that was highlighted at the College of Law Practice Management's 2011 Futures Conference at the Kent College of Law in Chicago noted that roughly 33% of law firms were moving to or considering cloud-based solutions for their technology plans. Decreasing concerns about secure, reliable Internet connections are a key driver in justifications for the cloud and all it appears to offer. I urge you to keep your eye on this and be accepting of the change in protocols it will require.

Before leaving the technology issues discussed at the 2011 Futures venue, I note one other comment that really caught my attention, among the many insightful things covered at this annual gathering of legal industry thought leaders. Law firms are using the Internet more and more to compete for business. One presenter made the comment that legal services access points, like Direct Law, are to law firms what Open Table is to restaurants. For those who have used Open Table to find and reserve a restaurant almost anywhere they travel in the United States, think about the consumers of our services now having that level of access to alternative providers for the more routine services attorneys provide. It should make you sit up and pay attention to how you market and brand your shop from an Internet-based point of view. Direct Law is by no means the only provider in this space, and do-it-yourself legal services are expected to approach a $1 billion market in the near term. Surf to www.colpm.org for more information on the Futures venue and the College of Law Practice Management, where I am honored to be a Fellow.

We are all in business to make a reasonable return on our investment of time and money, as well as on the risks we subject ourselves to every day we are open for business. Technology has long been touted as a way to increase efficiencies and profits, and we have been told this as part of the sales pitch for the new upgrade, new network, added monitors, Internet-based resource, and on and on and on. I am still not sure we will ever quite realize the enhanced efficiencies and profits we are promised, but I am confident in telling you that you must continue to embrace and invest in evolving technologies to stay competitive. This is more evident today than at any other point in my 30-plus years as a professional service provider.

Take-Away Points

In summary, here are just a few take away points:

Invest in cutting-edge, not bleeding-edge, technology and listen to the younger folks in your shop on their needs and preferences, as they are the future of our profession. The way I was taught to do things to be successful still works for me for the most part, but it might not work well for those who can type better or can concentrate better on information that is conveyed over the Internet. Just as a small example, our firm committed to two monitors for each professional a couple years ago and now we are seeing the justification for more than two when the individuals in front of them can use them efficiently. Providing employees with tech support for tablet-based applications is probably a better example of where we are today.

Identify who should be the champions within your practice to take the lead on assignable, technology-related aspects ' such as building and maintaining your electronic knowledge library ' or be the lead person on the use and application of certain resources such as searching databases, accessing online resources, or planning when and how to migrate applications to the cloud. It is probably not long before your firm's accounting, time and billing and library resources will all be maintained “in the cloud.”

Strive to find the balance necessary to maintain key relationships with staff, clients and referral sources when it is so darn easy to just fire off an e-mail to advance the ball. You might have the ball taken away from you when you do not also reach out when appropriate to communicate by telephone or invest the time needed to have that face-to-face contact. We all seem to be tethered to our Blackberries or iPhones, and I would challenge everyone to do without this wonderful resource for an extended period from time to time.

My wife and I took a three-week vacation outside the United States in January, and I purposely left my office e-mail behind. It was a bit like what it must be like at the summit of Mount Everest, as I found myself gasping for electronic air for the first few days but then felt very empowered to know that life goes on without having to check my e-mail every few minutes. I was reminded that customer service is not predicated on returning client e-mails instantly, as long as a protocol is in place to ensure customers' needs are adequately responded to by someone. I also must admit that I worked very hard to coordinate the opportunity to be “off the grid” for the most extended time I have ever done so, and I did this by having a great team supporting me, who “get it” in terms of their technology acumen.

Lastly, embrace the reality that Moore's Law, named after Gordon Moore the founder of Intel, remains in full bloom wherein he predicted that with the advent of transistors, computing power would double roughly once every 12 to 18 months. That prediction was made in 1965, and my sense is we ain't seen nothing yet. Technology impacts just about everything we do today professionally, but just don't let it get in the way of maintaining the balance in your life and the relationships that are most important to you.

Ron Seigneur is the managing partner of Seigneur Gustafson LLP, located in Lakewood, CO, where he focuses on a wide range of practice management solutions for professional service providers. Seigneur is a Fellow of the College of Law Practice Management and an adjunct professor at the University of Denver College of Law, where he teaches Applied Leadership and Management Theory for Law Firms. He can be reached at 303-980-1111 or [email protected].