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US law firms see technology as key to increasing profits

Technology budgets to increase significantly in the coming year

12 August 2015

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By Manju Manglani, Editor (@ManjuManglani)

Small and mid-sized US law firms are embracing technology as key to improving lawyer efficiency, according to newly-released research.

The survey of 145 leaders found that growing selected practices, winning new business and increasing efficiency were high management priorities in the past financial year.

Improved expenses management and investment in infrastructure were also strategic foci in 2014, resulting in many firms exceeding their profitability goals.

"Making smart investments in technology, time and talent are increasingly the paths firms are taking to increase efficiency and reduce cost pressures," commented John Remsen Jr, CEO of Managing Partner Forum, which conducted the survey with Thomson Reuters.

The research categorised firms by size based on their number of lawyers: less than 30 (small); 30 to 79 (mid-sized); and 80 to 174 (larger).

More than three quarters of larger law firms and two-thirds of small law firms adopted new technology in 2013-14, according to the survey. Nearly three quarters of mid-sized firms also brought in new technology.

"We're seeing more mid-size and small law firms look at technology investments as a means of servicing the needs of their customers better," said Remsen.

"What's absolutely vital is the training that goes with new technology."

A similar number of larger firms have also embraced strategic planning, with 63 per cent confirming they have a written firmwide strategic plan in place. Around a third of mid-sized firms also said they have a documented strategic plan.

This appears to be less of a priority in small firms, however, with only 16 per cent of such respondents having a strategic plan in place.

When asked about their strategic priorities for the coming year, respondents said their top three goals are marketing and business development, building a cohesive firm-first culture and growing current practice areas.

Also important are growing current practice areas and growing the business through lateral hires and/or acquisitions.

Just under a quarter of larger firms said that technological improvements are a top strategic objective in the year ahead, compared to more than a tenth of small firms and less than 10 per cent of mid-sized firms.

However, in terms of budgets, respondents from all firms said that business development and technology would have the biggest year-on-year increases in investment dollars in 2015.

 

 

 

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