I noticed a thread on a Legal IT forum over on LinkedIn last week posing the question “Where will the law firm IT department be a year from now?“. I started to post a response and realised I had much more to write than I could fit in one forum post, in fact there was so much that I’ve split it into a couple of blog posts.

This one looks at outsourcing and the overall purpose of a legal IT dept, then tomorrow I’ll post up some thoughts on the core technologies and what next.

Will IT stay in house or become an outhouse?
What are the options for outsourcing in the legal market in 2009? Personally I suspect many law firms IT depts will consider this, from an IT service perspective there is no real difference from a law firm to any other firm.

I don’t think that many law firms will try to outsource the whole dept, some have tried with other support functions (e.g. A&O’s 2003 move of document production to India) and almost all avoided outsourcing the whole function.

Some firms may find an outsourced help desk works well, others an outsourced data centre or development team. This is probably the most sensible approach, I don’t think the legal IT market has reached maturity yet and thus is still changing too quickly to be run as a pure “utility unit”, which leads too….

Will IT be run just to keep the lights on or will they install lights that are better than their competitors?
I read an article a while back in the Harvard Business Review (Your Next IT Strategy, October 2001 – no online verion) explaining how IT would slowly turn into a purely utility function for business and be thought of like the electicity, just some cost you pay.

Is this the future for law firms IT depts? In times like the current economic crisis, if you just look at pure “numbers” then it is tempting to feel this is a sound proposition. After all IT is a large cost on the balance sheets. There is an argument to say this could start to happen in 2009, after all most of us now use a DMS (Document Management System), a financial system, a CRM system etc Most of which are the same, so why not just keep the same stuff going as a service you buy?

But if everyone has it and does nothing new with it, this loses some of the key things technology can bring. A competitive advantage for your lawyers. The legal IT world is nowhere near as advanced as say financial services, where IT is ingrained in the business model. But I think the law firms that start treating IT as a pure utility will soon find firms that innovate using IT start taking their clients as the economy begins to pick up.