The LawBill Blog

The third (and final?) installment of Pixar’s “Toy Story” opened this weekend, the first initial theatrical release in the series in 3-D, and I was not disappointed. But, before you click away, this is not a movie review. Rather, I would like to spend a few minutes comparing the success of the series, which started in 1995, to legal office practice management. Stay with me here.

Toy Story 3

For any business, legal or movie franchise, to survive 15 years many people had to be doing many things right. Let’s focus on just three which apply equally to a law firm and a commercial movie.

1) Unified Goal: everyone is working from the same play book. At the end of each of the three movies there was a list of everyone who worked on the production. My guesstimate is that at least 750 people worked on this latest one.  The largest law office I support has perhaps 100 total staff and yet, one floor doesn’t even know what the floor below is working on. Practice management software, properly configured, administered and used by all of the legal staff would assure that everyone in the firm knows what everyone else is working on.

2) Complete Communications: whether email, inter-office text messaging or video conferencing, everyone is in touch with everyone else on their particular project all of the time. Deadlines are never missed, documents are never misplaced, messages are never lost. If an army of 750 can work together to produce a 103 minute movie, there is no excuse for a law firm 10 or 20 times smaller to ever miss, misplace or lose anything. Unfortunately, many law firms still consider Microsoft Outlook® their practice management software and cannot understand why they are not working very efficiently.

3) Embrace New Technology: whether adopting digital 3-D or using a “smartphone” or working on the cloud, it is imperative to utilize the latest technology to get the job done and keep the customers or clients satisfied. Unfortunately, too many owners of law firms, i.e. the senior partners, stopped growing and adapting the day they graduated law school. Sure they maintain their mandatory CLE credits, but these perfunctory “back-to-school” sessions are grudgingly attended. Pixar may have gone 3-D to add more money to its bottom line, but they applied it sparingly in the movie and kept their audience in mind when they did so. No scary monsters flying off the screen to frighten 3 year olds or their parents. Yet, most law firms which could afford the capital expense to upgrade computer networks, practice management software or email-, calendar- and matter management-enabled mobile phones fail to do so because those in charge don’t understand the benefits and those who do understand lack the economic clout to mandate the change.

This last point was especially driven home over the last 6 weeks as I attended the 2 largest legal conferences in New Jersey. Each boasted attendance of 2000+ practicing lawyers. During the sessions devoted specifically to technology in the law office the age of the average attendee skewed below 30, by a wide margin. Most of the inquiries I handled regarding time, billing or accounting software or practice management software always started with: “Does this software work on the cloud?” I suspect no one over 40 even knew what that meant.

Without giving the Toys Story 3 plot away, it is clear that the Pixar folks understood that everyone grows older and must learn to adapt to change. My warning to law firms is if they fail to learn these lessons, they will be left behind as relics of 20th century legal practice.

It’s rare that the 22 minutes of broadcast network evening ‘news’ ever delivers anything really new.  It is usually rehashes of staged political photo-ops, images of natural or man-made disasters or human interest feel-good stories. So the April 19 CBS Evening News with Katie Couric investigative report by Armen Keteyian, their chief investigative correspondent, entitled “Copy Machines,  A Security Risk” caught my attention for its relevance to each of my law firm clients.

Client Data is not secure on office copier hard drives

Along with “cloud computing” the buzz phrase du jour is “paperless office”. I myself am guilty of proselytizing the benefits of scanning every paper document received by a law firm and attaching the image to the relevant matter in a case management system such as Time Matters® or Amicus Attorney®. Until this CBS News report it never occurred to me that the mechanics of converting the paper image to digitized form required the use of a standard computer hard drive as the intermediary storage medium.  According to the report this methodology has been standard in every large form office copier since 2002. (Desktop scanners apparently do not utilize such a system with a built-in hard drive.)

As long ago as 2001 Sharp Electronics commissioned a survey of IT professionals in which 65% responded that copier/printers presented a security risk. As detailed in the CBS report in as little as 15 minutes the hard drive can be extracted from the copier, connected to a computer and using (free) software each of the images stored on it can be reproduced. Client Medical records. Employee Payroll records. The Partnership agreement of the firm.

The copier manufacturers recognize the risk and offer a “scrub” function for an additional cost which will erase each image as soon as it is created. However, and this is the key point, most law firms do not own their copiers, they merely lease them. Typically the lease is a financing agreement, not a security agreement, so there is no incentive on the part of the leasing company to include this extra scrub feature.  While most law firms are savvy enough to require their IT vendor to scrub decommissioned computer hard drives before they leave the office to erase sensitive client or firm information, who even talks to the copier movers when the old copier leaves the office at the end of the lease?

Today we sent an email blast to each of our law firm clients recommending that they contact their copier leasing company and request a written copy of the procedures which will be followed to scrub the hard drives on their current copiers when the lease expires. If there is no procedure, we are recommending that they send a letter indicating that the firm will not release the copier at the end of the lease unless the internal hard drive is scrubbed, on-site, before it leaves the law office.

What are you doing to address this very serious security issue?

On a corner of my desk rest two symbols of excess as reminders of why getting caught up in the “cool thing of the moment” is not a good idea.

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The Cool Things of Days Past

The first is a Pocket Lawyer. There he stands briefcase in hand and wearing a blue 3-piece suit, tasseled loafers and a wilder than Don King hairdo. When you press his middle he screams: “This is an outrage”, “My client is innocent”, “I’ll see you in court” and “Pay up you deadbeat.” Obviously the image of a lawyer from a different time, he was a hand-out at a legal tech show by reallegal.com (subsequently absorbed by Thomson).

The other is a Palm V, my first Internet purchase from someone obviously way cooler than me from California in 1999. With a whopping 8MB of RAM it has an Address Book, Date Book, To Do List, Memo Pad, Calculator, Expense, Games, Security, AvantGo Web Channel Manager and Chapura Pocket Mirror. The purchase was particularly exciting for me because, pre-Best Buy or eBay, the street price was $450.00, and I bought mine (slightly used) for a mere $325 plus shipping. I used it for almost 2 whole years before I realized that I really didn’t need it. But I did look tech-savvy as I exchanged contact information with other Palm V owners at legal conferences.

Fast forward to this past weekend, when everyone was gushing about the release of the iPad from Apple. As a proud original owner of an Apple Macintosh, purchased in 1987, I am not ignorant to the ways of Cupertino, CA. However, soon after I bought it, I learned how to build a PC, and found the limitations of Apple-only software too confining.  I still have the Macintosh as a reminder of why the $2,500 (!)  I spent for it was not money well spent.

Like bystanders at an auto accident, I was anxious to observe first hand the reception of the iPad at my local Apple store. Located 200 feet from a Nordstrom, it is definitely in a high-rent location. Three hours after the doors opened there were no lines, no press, no mob. Perhaps 10 other curious folks like myself standing around a rectangular display table on which 8 iPads were available to experience.

When it was my turn, I picked one up, touched the glass screen icons, changed the orientation to watch the screen readjust, read the NYTimes front page, opened a book, looked at an online map.  And of course, checked out lawbill.com. Guess what? None of my140 Flash training movies will run because Flash doesn’t run on an iPad. Game over.

The LawBill Blog on an iPad

At an adjacent iPad, a young woman and her mother were also appraising the iPad. The former was just starting a new business counseling children and was trying to convince her mother that it “would be cool” to display things to the kids on an iPad. The mother turned to me and sought my opinion. My response: “Do you have an endless supply of funds? If not, this is a mere distraction if it is not part of your core business plan.” The daughter replied: “You sound just like my father.” Case closed. No sale.

So, here in all of its glory for the first and last time, is The LawBill Blog on an iPad.

Don’t expect the LawBill iPad App anytime this decade. The Pocket Lawyer and my Palm V stand vigilantly to remind me that cool is not always in my best financial interest.

Today, most people equate the word ‘circus’ with Ringling Bros. and Barnum & Bailey. You would probably be surprised to learn that there are lesser-known practitioners of the traveling circus trade who still ply their craft. I had the opportunity to observe one such production this past week when the Walker Bros. Circus came to my town for one day only.

Lou Jacobs: Ringling's Most Famous Clown

What, you may ask, does this have to do with the legal software consulting business? Actually, quite a great deal. If you bear with me, I believe a good argument can be made there is much similarity between operating a traveling circus and operating a small to mid-sized law firm. And much to be learned from the former by the latter.

It’s all about the money

Think about it: what’s the very first thing you must do in order to enjoy the services of the circus performers? You have to pay for your ticket of admission. While certain law practices do obtain “retainers” in advance of performing legal work, most do not. Some firms even advertise: “If we don’t win, you don’t pay”. Not very circus-like. Thus, most firms are already behind the money curve on Day #1.

At the performance I attended, there were “commercials” between every act offering the “official” coloring book ($2), the “exclusive” 2010 plastic LED sword (batteries included) ($5), a once-in-a-lifetime opportunity for a high resolution (instant) color photo of your child on an authentic circus pony ($10). And don’t forget the food stand where delicious hot dogs ($3), cotton candy ($2) and drinks ($3) were available. You can see the pattern: the circus wanted to get as much money, in addition to the admission ticket, it could obtain while it had your attention.

Compare that to the average law firm where little or no effort is ever exerted to offer additional services to the client once their current matter is completed. Does the personal injury lawyer ever recommend that the estates lawyer in the same firm (or in a referred firm) consult on structuring a trust for that insurance company settlement the firm just obtained for the client? Does the corporate lawyer offer the services of the real estate lawyer to the CEO client? In the rush to specialize, firms have lost track of the bigger picture, once you have a client’s attention, you don’t want to lose it.

Everyone knows their own job and helps everyone else too

The first circus act was the aerial act by Kelsie. Then the clown. Then Kelsie returned in a different costume, assisting her brother in his balancing act. Then the contortionist followed by the juggler assisted by Kelsie’s brother in a different costume. Each time a performer returned as someone else’s assistant, it was clear that they knew each other’s act down to the last bow.

Compare that to a law firm where it is likely that two legal assistants don’t even use the same letter template to generate standard form letters. Or no one knows Susie’s “personal” password, so when she is out sick, no one can open her workstation to get to the letters which are saved only on Susie’s workstation. No teamwork. No one looking out for anyone else.

There is a system and everyone follows it, precisely

It was apparent to me, notwithstanding the fact that this group of traveling entertainers have been presenting the same act twice a day for 90 consecutive days, that every word, every gesture, every musical cue is repeated precisely the same way at every performance. No variation is allowed. The reason is simple: in order to deliver a uniform product, everyone sticks to the same script.

Compare that to a law firm where Partner “A” waits until the 5th day of the month to handwrite his time entries from all of the previous month, while Partner “B” completes her time entries at the end of each day. Or Partner “C” uses a completely different collection of form letters than everyone else in the firm uses, for exactly the same purpose. No firm-wide uniformity. No single script for the same work product.

If you fail to remake yourself, one day no one will care

Sadly, there was one other lesson from my day at the circus.

At a sunny, warm Saturday afternoon performance, there were less than 50 paying adults (2 kids free with each adult paid admission). This group of 25 performers and stagehands live out of motor homes parked in a different town every night, install the circus ring, lights, sound system, food counter and bleachers, put on a 70-minute show with multi costume changes and then pack everything back onto trucks for the next town, all for less than a $1,500 gate twice a day. How can they compete today with Ringling, video games, 500 channel cable or the Internet? I would suggest that they just don’t know how to do anything else.

How many law firms are practicing law the same way they did 5, 10, 15 years ago? How many are marketing themselves the same way? Hiring and training the same way? I submit that if a law firm fails to adopt the latest time, billing, accounting and practice management software it too will find itself unwanted.

What do you think?

The good folks at LegalBlogWatch posted a blog in 2007 by Carol Elefant “Typewriters Not Yet Obsolete…Law Firms Still Use Them“. A few days ago there was another post (sorry I lost that link) about the continued use of typewriters in law offices and a link to this story on the Oldest Typewriter Repairman in America: “93-year-old keeps alive nearly defunct trade — typewriter repair” . The theme in the lost post was that there were still jurisdictions in 2010 which required certain filings to be made, on a typewriter or by hand, on 3-part paper forms and thus practitioners had no choice but to use typewriters.

Recently legal technology guru Ross Kodner also weighed in on the same topic with this: “SmallLaw: Fill Out Forms With Adobe Acrobat Instead of a Typewriter“.

While I feel the pain of firms in jurisdictions which mandate the use of paper forms, it’s been my experience that the continued use of typewriters by law firms is the result of inertia of the staff or the inability of the office manager/managing partner to take the 15 minutes required to learn how to use the software the firm already owns to generate the forms and file labels which are essential to the operation of the practice.

Besides the aforementioned Adobe Acrobat typewriter function for forms, every major practice management and time billing and accounting software program has label generating utilities.  In PCLaw™ the utility looks like this:

Selecting the Case Label Template

Generates this result with a single mouse click:

A single mouse click generates this.

Time Matters, Amicus Attorney, TABS3, Practice Master, even Microsoft Word and Corel Word Perfect — they all have a similar function.

So, why do typewriters remain stationed on their lonely little typewriter stand next to the New Matter enterer’s desk? Because no one in charge of office procedure has bothered to review this process in 15 years. Unless the staff has not been given a salary increase in those 15 years, the law business is paying more money than necessary to generate a file folder label or mailing label or anything else that the ancient typewriter is still being used to generate. The maxim “If it aint broke don’t fix it” doesn’t apply here. There is a better, more efficient, less costly way with the firm’s existing software.

It is as if the typewriter has disabled the ability of the responsible party to clearly see that it has outlived its usefulness in a 2010 law business. Just like kryptonite disabled Superman’s powers. Don’t let this be a description of your law office. Donate the typewriter to your local museum and move on. It is time.

What do you think?

In the 1980’s there was a series of Hanes underwear TV commercials featuring the fictional Inspector #12 who ended each commercial with the tag line: “It doesn’t say Hanes until I say it says Hanes.” The message was that there was a final arbiter of what was good underwear.  Imagine if there was a comparable measurement of what constitutes an efficient law firm business.

Today, instead of Inspector #12, we have Andrew Z. Adkins III, Director of the the Legal Technology Institute at the University of Florida, Spessard L. Holland Law Center.  In conjunction with Perfect Practice, LTI recently issued the “Case, Matter, & Practice Management System Study“. Download the Executive Summary here. The study co-sponsors were Client Profiles, LexisNexis, Thomson Reuters, InsideLegal.com, Legal Files Software, Omega Legal Systems, PerfectLaw Software and Synaptec Software.

The study sought to measure the attitudes of a meaningful percentage of the 1.2 million licensed US lawyers towards current law office technology, seeking to uncover the degree of acceptance, implementation or repudiation of specified applications and the reasons for each. While only able to sample from a population of 799,132 lawyers, 27,500 surveys were sent to randomly selected names. The goal was to reach a 95% statistical confidence factor with a +/- 5% error level. In order to reach this goal, the survey needed a total of 384 returned surveys. Only 341 surveys were returned, so the error level increased to -/+5.3%.

Consisting of 75 questions, the answers to the Study were then parsed according to the indicated size of each respondent’s law firm. The sponsors of the Study were seeking answers in these three broad areas:

• What is the market penetration of case, matter, and practice management software? In
other words, what percentage of the legal profession uses case, matter, and practice
management system software?

• What are the barriers to law firms and legal departments implementing these types of systems? In other words, why don’t more people use them?

• Are law firms and legal departments planning on purchasing these types of systems in the near future? In other words, has the legal profession reached a plateau in adopting Case Management System software?

Of the 75 answers, the one that was of particular interest to me was #47:

Q: If your firm/law department does not currently use a Case Management System, how likely is it that your firm/law department would consider a Case Management System in the next 12 months?

A: Very likely = 18.3%

Expressed another way, if this answer correctly describes the attitude of the general law firm business population, almost 72% of law firms without a Case Management System today are not planning to install one in the next year. If that is not a poor business decision, I don’t know what is.

To me, this answer and the others in the Study speak volumes about the need for additional education of the legal business community. While malpractice is a legal term, I prefer miss-practice to describe a 2010 law firm lacking the understanding of how much operating efficiency they miss without a Case Management System and synchronized time, billing and accounting system.

Mr. Adkins’ study has parted the curtain to allow those interested to see how much more work is needed to bring the legal business community into the 21st century. The complete Study can be ordered here. I advise anyone interested in this field to get a copy and read the complete, detailed results.

What do you think about this topic?

On December 18, 2009, the New Jersey Supreme Court adopted Rule 1:42, which sets forth the mandatory continuing legal education requirements for New Jersey attorneys. The new Rule, which took effect on January 1, 2010, requires all attorneys practicing in the State (including judges, law clerks and in-house counsel) to take 24 hours of continuing legal education every two years, including at least four hours on topics related to ethics and professionalism.

Over the last four weeks I had the opportunity to speak with  many lawyers at the NYLegalTech conference and the NJ Association for Justice Continuing Education conference. My takeaway from these conversations was that the level of computer literacy among the legal community ought to be much higher than it currently is.

Granted, with 12 years experience as a legal software consultant my level of understanding ought to be quite high. However, when a name partner of a 30 lawyer firm does not even know if his/her firm is using practice management software, there is a wide education gap which needs to be filled. Some might argue that a senior lawyer at a mid-sized firm needs only to worry about generating new business. I would argue that if no less a business person than Warren Buffett could recite how many cases of Coca Cola and how many Acme Bricks were shipped last week then a law firm partner ought to know how his/her firm tracks appointments and deadlines, stores emails and organizes documents.

So I propose that a new category of lawyer education be promulgated: Continuing Software Education. While not as strenuous as obtaining an MSCA, classes could include: “Email Storage and Tagging”, “Cost Effective Document Management”, “Time, Billing and Accounting Best Practices”, “You and Your Firm’s Calendar”, and “The Mobile Legal Practice”. These sessions should not be limited to the 20-something associates. Attendance should be mandatory for every lawyer, since it is the more senior lawyers who, as partners, are paying for the efficiencies (or inefficiencies) of the law business they own.

Senior lawyers joke about how their grandkids know more about computers than they do. But who is the joke really on? It borders on business malpractice for any law firm in 2010 with more than 5 lawyers to be operating the business with less than full-featured time, billing accounting and practice management software in place and professionally configured. Would anyone continue to use a medical doctor who practiced medicine using techniques and equipment from 50 years ago? The same rule ought to apply to a law firm.

A mandatory Continuing Software Education for lawyers would go a long way to alleviate the existing knowledge gap among today’s legal community.

What do you think?

With the Winter games starting these week, it occurred to me that there is an Olympic-like event in which all lawyers who bill by the hour compete every day. Just as with an Olympic athlete, a lawyer’s effort to convert time into a billable event — i.e., gold — requires the right equipment and the proper training.

Keeping with the Olympic theme, I have observed that there are 4 types of lawyer “athletes”:

Failed to Make the Team: Lawyers for whom time stopped in 1970. For these lawyers a computer is an “electrified” typewriter. They hand-write time entries on a paper Time Sheet. Once a month they organize and review the paper sheets and then “type” a bill in Word® to be mailed to each client. They use a paper check book to write checks for firm and client expenses and to record receipts when payments are received. They pay an accountant to periodically collect the paper bills and check book and to re-create these transactions in the accountant’s accounting software to generate the financial reports needed to analyze the profitability of the law business.

Bronze: Lawyers who believe the year is 1990. On their accountant’s advice they use the Timeslips® and QuickBooks® software combination. They hand-write time entries on a paper Time Sheet and their assistant re-enters them into Timeslips. They follow their accountant’s instructions on how to record checks and payments in QuickBooks. They pay the accountant to periodically make sense of the QuickBooks entries to generate meaningful financial reports.

Silver: For these lawyers, 2000 was a very good year. They learned about time, billing and accounting software like Abacus®, TABS3® and PCLaw™. They keep a Time Sheet entry screen open on their workstations as they sit at their desks and make contemporaneous time entries directly into the software as the day proceeds. If they were out of the office they immediately record their time when they return. Their assistant/office manager uses the software to produce time reports, pre-bills, Invoices and Past Due statements, print checks and perform monthly bank reconciliations. The software generates detailed reports so that their accountants need not spend as much time (or bill them as much money) to create the financial reports.

Gold: These are the lawyers for whom 2010 technology provides the tools which enables them operate their legal business with the greatest efficiency. Every software program they use, whether Word®, Excel®, Outlook® or Internet Explorer® displays a billing program timer directly on the Toolbar. Reading each business email is a .2 hr billable event. Telephone calls are immediately recorded, timed and billed through their Practice Management software such as Amicus Attorney®, Practice Master® or Time Matters®. They are never more than 2 mouse clicks away from creating a billable event. When they are out of the office their “smartphone” permits them to record time entries which will synchronize with their billing program. In short, they bill for every working hour.

With the correct software and training every lawyer can earn on place on Legal Team Gold.

What are you waiting for?

The ever thoughtful John Heckman has asked: What is a Consultant, Anyway?

Here are my comments:

There seems to be an rift developing between those consultants who cringe at the new pricing models and those who justify it as necessary for the future of the software companies.

In my opinion, a consultant should not be an advocate for their client-law firms versus the vendors whose software products they support. A consultant’s opinion of the pricing of software, hardware or a vendor’s business model should never be part of a conversation with clients. Whether an annual fee quoted by the software vendor is 25% or 70% of the original purchase price is irrelevant. (Is $499 too much or too little for an iPad?) It is what it is.

It matters not what the consultant believes is too expensive, too cheap or just right. The legal marketplace will ultimately determine the correct price. The senior managers/owners at these vendors will succeed (get promotions, bonuses and profits) or fail (lose money or their jobs) based on the path they choose for their company to follow.

It is true that a bad choice by these vendors can result in a negative financial impact for the consultant supporting a product which is abandoned by the marketplace. However, the decision to support a particular product rests solely with the consultant. No consultant, as far as I know, was ever forced to invest their time and money to support any product. A successful consultant will be sensitive to the marketplace and adjust their business accordingly.

So, to answer the posted question, a legal software consultant provides an added value to the efficient operation of a legal business. While most of the consultant’s income is derived directly from the law firm a (much) smaller portion comes from sales commissions from the software vendor. I do not believe it is the consultant’s job to advocate on behalf of the law firm to the software vendor.

A software vendor bestows upon non-employees the privilege to represent themselves as a “consultant” for that vendor. A consultant’s job description does not include telling vendors what the vendor is doing wrong. Nor does it include raising objections to the vendor about pricing on behalf of law firm clients. I like it that way.

What do you think? Let’s get a dialog going.

The best feature of FiOS video service from Verizon, in my opinion, is the free DVR. It permits automated recording of TV shows and the Jump button will skip over the commercials. For the last several weeks I have been storing original “Twilight Zone” episodes. A 30-minute show only lasts 22 minutes without the commercials. The same themes are repeated: the Western Morality Play, the Space Exploration Fear, The Downtrodden Office Worker.

The last type is of particular interest because it portrays contemporary office life, circa 1960. Inevitably, the protagonist works at a desk at which he fills out large paper ledger sheets, line by line, with an ink pen. “How quaint that 50 years ago an office worker’s job was the same as it had been 100 years before that, sans electric lighting and air conditioning”, I would observe as I watched the story unfold.

Last week I spoke at the NJ State Bar Association Solo and Small Firm Section on the topic of “Case Management and Billing Software – How to Choose What’s Right for You”. As I was preparing the obligatory PowerPoint® I wanted to illustrate the “old” way of office automation compared to using LexisNexis PCLaw™, Time Matters® or Intuit QuickBooks®, so I searched the Web and found an image of the original One Write Check Ledger. There were quite a few chuckles from the Bar Association audience at such an “antiquated system.”

Fast forward 36 hours and I am in the office of a prospective consulting client law firm. It was my first visit. The office manager had invited me to discuss how she could improve productivity in the office. She had told me in advance that they already used Time Matters and QuickBooks, but “Not as efficiently” as they believed the programs could be used. This is a very busy office with 5 assistants and two lawyers.

After reviewing their Time Matters usage (which was limited to only the ‘Contacts’ function) I asked to observe the procedure used to enter a New Matter. They pulled out a large double-sided ledger book onto which each new matter was added by hand and the accompanying 3″ x 5″ index card onto which they wrote the same information a second time for ‘quick alphabetical lookups’. I merely shook my head in disbelief.

I was then ushered over to the bookkeeper’s desk. I froze in astonishment: there on the desk was a still used One Write Check Ledger! I stifled the urge to look at the date on my cell phone, for fear it would read 1960. When I recovered my composure I told them that we had “a lot of work to do”.

As I returned to my office the voice of Rod Serling, the “Twilight Zone” creator echoed in my head: “The lesson for this week is that if a law firm owns practice management and accounting software and yet is operating its law business as if it was 1960, you might be in the “Twilight Zone.”

Is your firm operating in the “Twilight Zone”?

What do you think? Let’s get a dialog going.