The 2016 Law Firm Benchmarking Report finds a large number of firms positioning themselves to incorporate more collaborative tech in their legal projects over the next two years.

Ricci Dipshan, Legaltech News

Despite the advancements of legal collaboration technology, and the cost-management demands of the modern economy, only a minority of law firms have adopted collaboration tools to foster efficiency within their legal projects, according to the 2016 Law Firm Benchmarking Report, conducted by Exterro.

The report, which surveyed 112 employees of U.S. law firms that held titles ranging from partner and shareholder to discovery manager and paralegal, found that most clients are demanding more value for their fees. Almost 80 percent of respondents noted that their clients expected more work and services for lower fees, while slightly over half (54 percent) of their clients have started to handle more legal work in-house.

These market pressures, however, have not yet forced many firms to turn to technology to modernize their project management and workflows. According to the survey, a large number of firms were still using manual processes to manage legal projects, including 40 percent that used spreadsheets and 50 percent that used emails. Only slightly under one-third (32 percent) used legal project management software, while just under one-quarter (24 percent) used matter management software.

But a change may be on the horizon. The report found almost half (49 percent) of law firms were looking to evaluate their collaboration software over the next two years, with 42 percent looking to evaluate or use legal project management software, and 30 percent looking to do the same with matter management software.

Bill Piwonka, CMO at Exterro, believes that “client pressure for more value at a lower cost has really ratcheted up in just the last couple of years.” He noted that “for firms used to managing client projects as they have done for years, this pressure to change presents challenges. But the writing is on the wall, and firms have woken up to the need to adopt new technology—including legal project management— as a way to compete in a very competitive market.”

Adoption of collaboration technology to drive efficiency, however, is only part of the solution. According to the survey, many firms’ project management workflows are inefficiently defined and organized. Over half (51 percent) of firms, for example, had legal project management structures that were constantly changing with no fixed manager or budget, or structures that were underfunded, in which managers did not enforce workflows or processes.

In addition, only 15 percent of the firms had a dedicated project manager or litigation support professional manage projects, while 49 percent of firms had their legal projects primarily managed by the firm’s partner.

Over half (52 percent) of law firms also rarely or never tracked their productivity on an employee level outside of tracking billable hours.

Piwonka noted that tracking productivity “can be a hard nut to crack. However, I think as clients expect more for less, firms will have to start tracking internal productivity to stay competitive. One of the easiest ways to do this is to incorporate legal project management policies and technology to enforce accountability and transparency into projects and give project managers ways to easily identify where hurdles exist and correct them in a timely manner.”

Budgets for outsourced technology, e-discovery and project management also varied significantly for respondents, with slightly over one-quarter noting their firm allocated up to $10,000 per year for these services, while 15 percent said they spent between $10,000 and $100,000.

In addition, 9 percent spent between $100,000 to $250,000 for such services, while 12 percent spent over $250,000 per year. Most respondents (37 percent), however, did not know their firms’ technology and project management annual budget.