The Legal Sector’s Revolution Will Not Be Televised

There is a quiet revolution taking place amongst law firms – and it could protect firms’ operating profits in a challenging year.

And while the change involves technology and automation, it is not found between practitioners and clients. It is not a ‘front office’ trend.

No, the quiet revolution is occurring behind the scenes.

For years, law firms have modernised, embracing technology to keep pace with change. From time-keeping to document storage and processing, technology has helped the legal profession to become a mobile, adaptable industry. Indeed, the founding father of the so-called Quiet Revolution was a lawyer: Jean Lesage ushered in a period of modernisation and much change in mid-60s Canada from his base in Quebec.

The changes being adopted now, however, are hard to spot. If you are a client, you would not notice. If you are a front-line practitioner – unless in management – you are often unlikely to see it, too.

Yet it is there. Scores of firms are not only revamping their client propositions; many are turning to their operations to seek efficiencies and improvements.

The most important reason for this is to reflect in firms’ day-to-day operations the same modernity and pace now experienced in client services. And at no time is this more important than when two different organisations consolidate.

Over the last decade, mergers and acquisitions in the legal sector have been a big trend. Last year, Legal Futures confirmed just how active the market is in a survey of 100 law firms. They found that nearly 50% (47) were considering M&A, and a quarter of this group (23%) were already in talks about a possible deal. Meanwhile, a further 57% of this group were ‘actively’ seeking one.

Scores of firms are not only revamping their client propositions; many are turning to their operations to seek efficiencies and improvements.

Looking ahead, things are only set to pick up pace, with analysts now predicting that M&A activity will surge in the recession as bigger firms look to take advantage of the economic downturn and acquire smaller firms at lower prices. And as consolidations pick up pace, so too will the discreet movement away from the past way of doing things.

There are many reasons why it is important for firms to transform operationally as they consolidate. The situation that Dutch multinational HR service provider Randstad found itself in in 2015 provides a great example.

Randstad merged various units that year and, historically, had always worked with multiple independent systems to order items and services and create invoices, each with its own set-up and process. But with this fragmented system, the organisation ran into problems. There was little control over purchases, and approval of orders often took place after – not before – the receipt of the invoice, resulting in unnecessarily high costs for the business.

So, the business introduced a single ordering and payment process for the entire organisation, meaning employees could directly place their orders in ‘web shops’ of preferred suppliers. Everything became processed within a single application. Authorisation was automatic, and it became easier to gain insight on which suppliers are responsible for the most expenditure.

This great level of transparency and authorisation put a complete stop to maverick spend in the business and gave an up-to-date overview of expenditure and outstanding commitments. Crucially, too, for the staff who were shifting systems, ordering was made easier.

The effects of streamlining processes with technology can be dramatic. This is especially true for firms that are undergoing changes of magnitude. Availability and oversight of data is a rare thing in manual or outmoded finance and operations functions. Yet for years law firms have acted blind.

Until now, most finance directors in professional services firms would not be able to tell you in real time how much money was leaving their firm and why. In a period of recession, where cost management is paramount, that is a major handicap.

Not all revolutions are overtly disruptive. The quiet ones effect clear change over time. That is exactly what is happening in the legal profession as – at last – operations catch up with client services.

Proactis

Riverview Court, Castle Gate, Wetherby, Leeds, LS22 6LE, UK

Tel: +44 01937 545070

Ilija Ugrinic is Commercial Solutions Director at Proactis, having joined the company in 2014. Ilija draws upon more than 20 years’ worth of experience in spend control and eProcurement, helping automate and optimise processes for many leading organisations across the public, not-for-profit and private sectors.

Proactis is a leading Source-to-Pay software solution provider for mid-market organisations across a range of service-led industries. Proactis’ end-to-end modular platform enables customers to control spend and manage supply-chain risk; improve compliance and governance of their purchasing activities; reduce the cost of goods and services; and deliver efficiencies, all through process digitisation and automation.