There has been quite a bit of activity on blogs and twitter recently about the billable hour, questioning its validity in the current economic climate (see this story on law.com), however it’s this article on 3 geeks and a law blog that caught my eye (in fact I hope they don’t mind as I’ve kind of plagiarised their blog post title!). You might also want to take a look at The Client Revolutions posting on the subject which in turn references this post by Adam Smith.
The reason I pointed out the 3 geek’s post though was that it addressed the question on what it means for support staff. It got me thinking on how the legal IT department would change if there was a sudden shift to flat-rate billing.
I think Greg is when he talks about the one word that gets mentioned when alternative billing is put about “efficiency”. Now when IT is done right one thing it can be very good at is creating “efficiency” (conversely it can also be great at making things inefficient if it’s not done right).
Take a look back a few years to the Woolf reforms in the UK and in particular the effect on the personal injury market. Insurance departments started to use technology to make things more efficient. In particular Case Management software enabled some of the work lawyers did to be pushed to paralegals or even secretaries simply by following the workflow of the system.
Similarly Knowledge Management systems can enable firms to draw on a wealth of previously created precedent documents, meaning a reduction in time taken to draft new documents.
These systems have been used in the past and are used now, but I imagine that more and more there will be a demand to use technology to drive down costs. However I think before this happens there will be the usual approach to cutting costs, downsizing and budget cuts! So for 2009 I think (as with most industries) we will see IT departments shrink, but as the push for more efficiency takes hold I think the firms that step up and embrace technology to achieve efficiencies will be the winners.
The challenge for IT is to help lead this “revolution”!
Jason, great piece – completely agree that this is the perfect time for IT to shine – to show how technology can be leveraged to increase efficiencies and…dare I say it…even revenue!
Any specific thoughts on how IT can/will support the alternative billing push?
My guess would be the alternative would possibly be fixed price work or cost based on value.
So the area that occurs to me is some kind of case budgeting. I have been involved in this type of system back in the late 90’s and it uses past experience/cases to “cost” tasks. On a new case project management type planning is used and then the knowledge of the costs is applied. Allows accurate costing for fixed price work (also occurs to me now that you could look at the critical path and keep your expensive people on this alone)