How Legal Services Can Maintain Profitability in a Shifting Landscape

In order to stay afloat in this new market, legal services firms have no choice but to educate themselves on these shifts and adapt their strategies and habits to rapidly changing market realities. Many firms have taken dramatic measures in order to preserve profitability by cutting expenses (and staff) extensively. However, according to the Georgetown Report, this may initially reduce expenses; but they will eventually grow again as most of these cuts are “deferrals of expenditures that had to be made sooner or later rather than eliminations of particular programs or activities.” Instead of taking drastic measures that will only provide temporary relief, legal services firms are advised to develop a more comprehensive, long-term strategy for regaining profitability.

Many law firms are still spending more time than ever on file-related tasks. A recent survey conducted by industry analyst firm IDC found that wasted time spent on document-related challenges amounts to a 21.3% loss in the organization's total productivity. This is commensurate to how much it would cost a company of 1,000 employees to hire 213 new workers. Now more than ever, legal services firms need guidelines and practices to manage complications around workflows so the time rationed to administrative tasks can be focused on core services.

Embracing a thorough document process management program is a great first step for firms to reduce administrative time and become more flexible in turbulent economic conditions. Creating a successful program involves reallocating resources and labor to streamline operations and outsourcing certain functions, including print and mail management as well as e-discovery processes. Outsourcing can enable firms to focus more time and resources on their core mission: practicing law.

What follows are a few critical ingredients based on improving records and print/copy management processes. In our experience these areas represent solid opportunities for improving efficiency, reducing costs and enhancing compliance. The examples I cite are based on actual case histories of how we teamed with firms to achieve important business benefits.

Improve Workflow and Communication. Ineffective records and document process management practices can hurt operational efficiency and expose a firm to higher risk. For one law office, improving workflow and communication was critical to improving efficiency and enhancing regulatory compliance. We worked with the firm to advance these goals by creating a Customer Service Representative (CSR), a supervisor-level employee who coordinates digital, voice and personal communication with law office personnel. The CSR functions as the single point-of-contact to help streamline communications, balance workloads and ensure attorneys, paralegals and secretaries that they will get a timely response. The CSR also checks that file creation requests meet criteria set by the firm's records policies and procedures ' a practice that did not previously exist. Accountability ' knowing where a file is at a given time ' was improved by tracking files from the beginning of their delivery to their return. Additionally, we worked with the firm to initiate a file inventory process to periodically update the records management system. These and other changes significantly improved speed in locating files and reduced the risk of non-compliance with court-ordered discovery requests.

Raise the Level of Staff Professionalism. For the aforementioned firm, training was also an issue. The office's records staff had not been adequately trained on records management best practices; the staff also lacked a clear career path. To help rectify these problems we implemented a new staffing model based on a defined reporting structure. This included assigning specific tasks to staff members, such as courier or file storage responsibilities; providing operational details and performance criteria for each task; and communicating personally with law office personnel. Other new procedures helped, which include changing how the law office manages its offsite file storage. The previous approach involved seven individuals, each located in a different file room, responsible for preparing boxes of files that were picked up weekly by a storage provider and delivered to an offsite facility. We consolidated this process by making one person responsible for offsite storage preparation and delivery procedures for all of the file rooms. Additionally, we reduced the weekly pickups by the provider to twice a month, significantly reducing the firm's costs.

Leverage a Managed Print Services (MPS) Model. MPS centralizes the print and copy responsibility and creates an integrated bundle of services, consulting, software, parts and supplies, so that organizations, including law firms, can make smarter decisions that yield solid business benefits. The MPS approach, whether managed internally or on an outsourced basis, treats the print and copy process as a comprehensive bundle of services provided to the organization's end users. The following are four guiding principles to help your firm optimize its document management process:

1. Plan the output infrastructure and how it should be managed.
2. Implement infrastructure and processes that will support an optimized MPS program.
3. Continue to improve the MPS program over time with digital equipment functionality and methods that can be fused with the firm's business systems.
4. Sustain these initiatives through best practices.

Use Document Imaging to Increase Productivity. Another way legal organizations can drive operational efficiencies is by leveraging the many business benefits of document imaging. The same firm mentioned above committed itself to reducing its dependence on paper-based case management files in order to improve productivity. Its goals included slashing the time necessary to respond to client requests and improving internal access to case-related materials, critical for a firm with attorneys located in multiple offices. We worked with the firm to develop and deploy an e-records pilot program designed to help meet these goals. The program comprised an electronic case management process that involves saving document images to folders using the same naming conventions as the physical file folders stored in the firm's central file system. This provides continuity between electronic and physical files. The scanned images can be stored as easily accessible electronic case files in folders on a shared drive, with a standardized process developed with input from the firm's staff. This new approach yielded two important results: increased productivity in the ability to more quickly find electronically stored information, and measurable savings in billable hours traditionally spent waiting for physical information to be retrieved and reviewed.

Conclusion

Major business shifts are understandably daunting. To meet these challenges, legal organizations can initiate the above and other strategies, whether managed internally or with an outside services provider, to streamline their document management activities and business processes. This approach can provide lasting dividends on the road to success in the months and years ahead.

Scott Paster is the Director of the Legal Solutions Group for Canon Business Process Services, Inc., a leading provider of managed services and technology to leading corporations and law firms. He can be reached at [email protected].

Since the 2008 economic downturn, the U.S. legal market has undergone a permanent restructuring. With huge firms collapsing due to crippling debt, we see that legal services firms are no longer untouchable. The legal environment has become increasingly challenging as competition has increased, demand for legal services has remained flat, and firms are being forced to adopt more efficient, cost-effective and strategic business models. Further challenging legal services firms are: the visibility of public information about their capabilities, practices, clients and earnings; the drive towards commoditization of legal services; and the impact of globalization and cross-border mergers.

According to the “2013 Report on the State of the Legal Market” by The Center for the Study of the Legal Profession at the Georgetown University Law Center and Thomson Reuters Peer Monitor, firms will not stay profitable in the future without streamlining their business structures and improving operational efficiencies. See , http://bit.ly/191cxcT.

Educate and Adapt

In order to stay afloat in this new market, legal services firms have no choice but to educate themselves on these shifts and adapt their strategies and habits to rapidly changing market realities. Many firms have taken dramatic measures in order to preserve profitability by cutting expenses (and staff) extensively. However, according to the Georgetown Report, this may initially reduce expenses; but they will eventually grow again as most of these cuts are “deferrals of expenditures that had to be made sooner or later rather than eliminations of particular programs or activities.” Instead of taking drastic measures that will only provide temporary relief, legal services firms are advised to develop a more comprehensive, long-term strategy for regaining profitability.

Many law firms are still spending more time than ever on file-related tasks. A recent survey conducted by industry analyst firm IDC found that wasted time spent on document-related challenges amounts to a 21.3% loss in the organization's total productivity. This is commensurate to how much it would cost a company of 1,000 employees to hire 213 new workers. Now more than ever, legal services firms need guidelines and practices to manage complications around workflows so the time rationed to administrative tasks can be focused on core services.

Embracing a thorough document process management program is a great first step for firms to reduce administrative time and become more flexible in turbulent economic conditions. Creating a successful program involves reallocating resources and labor to streamline operations and outsourcing certain functions, including print and mail management as well as e-discovery processes. Outsourcing can enable firms to focus more time and resources on their core mission: practicing law.

What follows are a few critical ingredients based on improving records and print/copy management processes. In our experience these areas represent solid opportunities for improving efficiency, reducing costs and enhancing compliance. The examples I cite are based on actual case histories of how we teamed with firms to achieve important business benefits.

Improve Workflow and Communication. Ineffective records and document process management practices can hurt operational efficiency and expose a firm to higher risk. For one law office, improving workflow and communication was critical to improving efficiency and enhancing regulatory compliance. We worked with the firm to advance these goals by creating a Customer Service Representative (CSR), a supervisor-level employee who coordinates digital, voice and personal communication with law office personnel. The CSR functions as the single point-of-contact to help streamline communications, balance workloads and ensure attorneys, paralegals and secretaries that they will get a timely response. The CSR also checks that file creation requests meet criteria set by the firm's records policies and procedures ' a practice that did not previously exist. Accountability ' knowing where a file is at a given time ' was improved by tracking files from the beginning of their delivery to their return. Additionally, we worked with the firm to initiate a file inventory process to periodically update the records management system. These and other changes significantly improved speed in locating files and reduced the risk of non-compliance with court-ordered discovery requests.

Raise the Level of Staff Professionalism. For the aforementioned firm, training was also an issue. The office's records staff had not been adequately trained on records management best practices; the staff also lacked a clear career path. To help rectify these problems we implemented a new staffing model based on a defined reporting structure. This included assigning specific tasks to staff members, such as courier or file storage responsibilities; providing operational details and performance criteria for each task; and communicating personally with law office personnel. Other new procedures helped, which include changing how the law office manages its offsite file storage. The previous approach involved seven individuals, each located in a different file room, responsible for preparing boxes of files that were picked up weekly by a storage provider and delivered to an offsite facility. We consolidated this process by making one person responsible for offsite storage preparation and delivery procedures for all of the file rooms. Additionally, we reduced the weekly pickups by the provider to twice a month, significantly reducing the firm's costs.

Leverage a Managed Print Services (MPS) Model. MPS centralizes the print and copy responsibility and creates an integrated bundle of services, consulting, software, parts and supplies, so that organizations, including law firms, can make smarter decisions that yield solid business benefits. The MPS approach, whether managed internally or on an outsourced basis, treats the print and copy process as a comprehensive bundle of services provided to the organization's end users. The following are four guiding principles to help your firm optimize its document management process:

1. Plan the output infrastructure and how it should be managed.
2. Implement infrastructure and processes that will support an optimized MPS program.
3. Continue to improve the MPS program over time with digital equipment functionality and methods that can be fused with the firm's business systems.
4. Sustain these initiatives through best practices.

Use Document Imaging to Increase Productivity. Another way legal organizations can drive operational efficiencies is by leveraging the many business benefits of document imaging. The same firm mentioned above committed itself to reducing its dependence on paper-based case management files in order to improve productivity. Its goals included slashing the time necessary to respond to client requests and improving internal access to case-related materials, critical for a firm with attorneys located in multiple offices. We worked with the firm to develop and deploy an e-records pilot program designed to help meet these goals. The program comprised an electronic case management process that involves saving document images to folders using the same naming conventions as the physical file folders stored in the firm's central file system. This provides continuity between electronic and physical files. The scanned images can be stored as easily accessible electronic case files in folders on a shared drive, with a standardized process developed with input from the firm's staff. This new approach yielded two important results: increased productivity in the ability to more quickly find electronically stored information, and measurable savings in billable hours traditionally spent waiting for physical information to be retrieved and reviewed.

Conclusion

Major business shifts are understandably daunting. To meet these challenges, legal organizations can initiate the above and other strategies, whether managed internally or with an outside services provider, to streamline their document management activities and business processes. This approach can provide lasting dividends on the road to success in the months and years ahead.

Scott Paster is the Director of the Legal Solutions Group for Canon Business Process Services, Inc., a leading provider of managed services and technology to leading corporations and law firms. He can be reached at [email protected].