Understand the Lifecycle of Law Firm Technology
The Lifecycle of a Law Firm
Solo and small law firms typically follow a lifecycle not unlike that of technology companies. There are law firm startups, as new lawyers hang out their shingles in practice. There is internal growth as law firms become successful. And there are law firm mergers and acquisitions, driven by a desire to seek skill synergies and enhanced economies of scale. There are law firm buyouts, as lawyers reach retirement age or simply decide to head for greener pastures, and sell their practices to another qualified attorney or firm.
Addressing Law Firm Technology
Through this life cycle, law firm technology must also evolve. Whether used for document processing, case or litigation management or record storage, computer technology has become integral to how law firms operate. The technology concerns at each stage of the life cycle continuum are different, and addressing them is essential for the financial and client service strengths of the firm as an effective, continuing business organization.
Law Firm Startup Technology
In a law firm startup, one risk is that lawyers will be beguiled by more technology than they can afford. Particularly for startup solo practices, substantial spending on new computer hardware and software may simply not be possible during the five years it takes most new practices to become profitable. Refurbished computers, open source software, a free email management program, and online research at a law school library are among the most practical options, until the - whether cash, lease or loan - becomes available to make a technology purchase.
Law Firm Buyout Technology
In a buyout situation, the age of firm technology is crucial. If the firm resisted buying or updating technology because of the high up-front expense, the outdated hardware and software diminishes the value of their firm in negotiations because a potential purchaser will need substantial IT investments. But if technology has been kept current, it should be communicated up front, so the value of hardware and databases can be reflected in the purchase price.
Law Firm Merger Technology
When law firms of any size merge, assessing the current state of technology used by the lawyers or firms, including the age of the hardware and software and their replacement cycle, should be - but rarely is - central to the merger due diligence. The default platform should be the one used by whichever of the parties to the combination has up-to-date databases, hardware and document processing and practice management software tools. But there must be adequate planning for proper integration and coordination of software to manage finances, client contacts and case files. As in startups and buyouts, there is no one right way to approach these technology issues. The wrong way is to ignore them and suffer the negative consequences.
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