3 Firm Size Impacts Technology Choice

The Hourglass

The legal profession has undergone structural change in the last 20 years that has impacted the technology that it uses. Solos and small firms – defined variously as those from 2 to as many as 50 but more usually 10, if you look to the regulators and bars and not to the technology vendors – have dominated the profession and are likely to do so for the foreseeable future.

Mid-size law firms and large law firms are almost practicing in a different legal profession. Economic and other pressures or opportunities have led to the largest law firms growing larger. This has often happened at the expense of a particular mid-size firm that is absorbed. In other cases, two mid-sized law firms will merge to create a newer, larger firm. In 2014, the National Law Journal’s annual survey had a top firm with over 4,000 lawyers.  In 1978, it was 434.   The NLJ survey has expanded from 50 firms in 1978 to now cover 350 in 2014. The smallest of those firms has 115 lawyers.

national-law-journal-250-350-largest-firms-trend

This is the market for most legal technology software companies. The size differences reflect a spending difference, and the split means much of the technology marketed towards lawyers is, in fact, marketed to mid-size and large law firms. The solo and small law firm end of the market has attributes that make it hard for this software, often called enterprise because it is aimed at large organizations, to be implemented or expensive to sell or acquire.

The term enterprise is used in for truly large organizations and reflects software that is to be used by everyone in the organization, often thousands of people. Legal vertical software vendors often call their software enterprise as well to distinguish it from consumer-grade or small firm software, but the largest law firm is barely a mid-sized business in the broader business world.

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Data from American Bar Association shows trends in law firm size over time. There were no firms with over 100 lawyers in 1980.

 

So on the one hand, you have a significant distinction between the types of software available. Large law firms will tend toward enterprise software, whether it is designed for the law firm or for wider business uses. The International Legal Technology Association‘s annual technology survey is the best place to find out what larger law firms are using. Many of the core large law firm functions – email management, document management, and the like – are handled using business enterprise software from the likes of Open Text, HP, and Microsoft and the product may have no particular legal focus.

At the same time, the solo and small firm market will tend toward consumer software, designed not just for the small business user but also for the non-business market. A review of the products listed as the most common in law firms by respondents to the annual ABA Legal Technology Survey will make this point better than listing them. The survey breaks out the legal-specific software because so many law practice functions – like case management – are handled by respondents using generic programs, like Microsoft Outlook, rather than software designed specifically for lawyers.

Law Firms are the Same. And Different.

There are some similarities across firm size, though. One will be immediately familiar to those in a law school setting. Law firm partners are very much like law school faculty. The tenure and partner system mean that, in some ways, each member of the faculty or firm can still operate with a high degree of individual freedom. This flattened peer structure means that one professor or partner may adopt one type of technology while the one next door may adopt another. Just as in law schools, where the technology is frequently standardized (a Windows PC with Microsoft Office, for example), a law firm may have a technology standard. Whether everyone in the firm actually adheres to that standard is another matter.

Despite these individual fluctuations – where a partner using bring your own device resembles a solo who always brings her own device – law firms operate in the same client / server environment no matter how large or small. In the 1980s, before the Windows operating system brought local area networks (LANs) to law firms through its operating systems, cutting edge law practices used Novell, LANtastic, Banyan Vines and other networking technologies to stitch together machines.

At the heart of the network would be a higher powered computer known as a server; there might be more than one. Each of the PCs sitting at the lawyer and, more importantly, paralegal and legal assistant desks where a lot of the actual work was being done, would connect to the server.   It might be a file server containing the firm’s documents. It might run a document management system, enabling not only file storing but version control and check-in/check-out abilities.

Times haven’t changed much. Law firms still operate using a client / server configuration. Increasingly, the servers are no longer sitting within the law firm’s four walls. Large law firms are outsourcing their server management to hosted providers who can add business continuity and uptime guarantees that are hard to achieve internally. Small law firms and solos are looking at the cloud, where their servers are not only managed externally but everything is handled by a remote service provider.

Related Reading and Resources

* Check your law school library to see if they own any of these fee-based resources or whether they can borrow, through interlibrary loan, any they don’t own