LAW FIRMS: MINIMISE RISK TO MAXIMISE GROWTH IN YOUR FIRM?

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The past few weeks we’ve been discussing the 3 Pillars of Innovation.  The 3 Pillars has even evolved in to a tool which can help you measure your law firm’s innovation and growth potential – you can have access for a short time here.

The 3rd Pillar – Maximising Business Continuity (Minimising Risk) is in fact the most important  step toward a growing, profitable, innovative law firm – if you think of the Risk Pillar as a foundation then it makes sense that Increasing Revenue and Creating Efficiency can sit comfortably on top without being undermined by problems destabilising the firm.  If the Risk Pillar crumbles then everything goes with it.

I never thought I’d be writing a post about risk to an audience of law professionals.  As an IT advisor I’ve talked about managing risk to entrepreneurial businesses who typically grow fast and ask questions later – if at all – until it’s too late.  Lawyers on the other hand are somewhere at the far opposite end of that spectrum.

As someone who writes about IT and is about to delve in to the topic of risk, you’d be forgiven if you thought my next sentence would be something about making sure your law firm has a backup or ensuring you have the latest antivirus.

The reality however is that backups should rate pretty low on the risk-o-meter these days.  If your law firm doesn’t have a data backup then this article is probably not for you (yet) and I promise I’ll save the general IT advice for another article for a different audience.

 

“My concern for law firms is that many will face disruption and possible extinction due to a new kind of risk: Digital Disruption, Aggressive Online Competition, Inefficient, Inoperable or Insecure IT Systems and a Less Loyal Clientele who will move far more quickly on price and convenience than was ever possible before.”

 

So does your law firm minimise risk?

Or more importantly, does your law firm represent a risk to other firms because you are capitalising on new technology?  The latter is an important differentiation.  Traditionally risk averse law firms with minimal appetite for change are the ones that now face an existential threat while your law firm sets its sights on a growing market share.

Minimising Risk in the new law is about positioning yourself as a challenger while protecting the platforms that keep your firm visible and operational.

 

Managing the new risks for law firms:

 

  1. Your IT systems including your telecommunication systems, email, internet, website and online presence MUST be continuous and available at all times

If you think of your law firms IT as your store front or head office then it is not acceptable to have a “back in 2 hours” sign on the door.  2 hours in the online world = client or prospect has long since moved on and that’s just your online presence.

In our survey we found that more than 70% of law firms don’t have anyone designated as responsible for disaster recovery if and when there is a disaster and that about the same number do not know how long it would take to restore service if the company had a major fault in any area.

A simple change in focus can help minimise risk here – don’t ask IT personnel whether there is a backup, ask them “how long will it take to get our systems back online” and decide if the response you get is acceptable.  In addition, appoint someone who is ultimately responsible for restoration of any IT related service.

 

  1. Your systems must be secure no matter where they reside

In our survey we found that 73% of firms don’t have systems in place to prevent personal devices accessing firm data during or after their employment.  In addition, many firms believed that employees and subcontractors have access to data right now that they shouldn’t have.

Because IT resides on internal IT systems as well as the cloud, mobile devices and home computers your IT policies and procedures need to extend beyond the old traditional platforms.

Your internal process should include a regular review of who has access to what and because IT is ever-expanding, this process should be ongoing.

 

  1. You must have and protect your virtual reputation

The 3 Pillars highlights the need for firms to consider every possible way to Increase Revenue by making use of digital marketing, social media and other online activities.  The high performing firms are carving out online real estate and capturing new markets with this new wave of technology.  You not only need a strategy to be in this space you also need a process to minimise your risk online.  That means monitoring social media for mentions of your brand, having clearly defined policies for how employees of the firm behave online and ensuring staff are regularly educated about online etiquette.

Failing to enter the digital marketing space is not minimising risk – entering that space as a well informed participant is a great strategy for law firm innovation.

 

  1. Your law firms performance must be visible

In a connected world with all of your key business systems online you must have the ability to plug in and access data to help your firm make decisions.  If you’re receiving important financial data after the month is over you are a month behind your tech savvy competitors.  If you don’t have data to inform you of an unhappy client then your loyalty systems are outdated.  If you don’t know the outcome of an online marketing campaign (or you’re not running them) then you may not be able to grow as quickly as others do.

In addition, many of the technical risks mentioned in this article could be avoided if you received routine reports highlighting these areas from your IT personnel who should have their finger on the pulse in relation to security, disaster prevention and online presence on a broad scale.

Everything is digital and innovative firms capitalise on real time information to make quicker decisions and minimise risk.

 

  1. Take the Free 3 Pillars Test

Of all the responses we’ve had to the 3 Pillars these past few weeks, this has been the best summary we’ve had so far:

“I found the 3 Pillars Tool very thought provoking. It highlighted areas that we could focus on to improve our performance. It also asked questions about processes that I should have been able to answer easily as a senior manager that I struggled to answer (ie I wasn’t entirely clear if we had a process or policy in some areas, or if we did what it was) which was an enlightening experience”

Simon Blake –National Group Manager, Australian Government Solicitors.

 

In other words – you don’t know what you don’t know.  With technology moving so quickly there are new ways to innovate and new risks to manage.

Determine how at risk your law firm is by measuring your performance in the 3 Pillars.  Are you in a position to Increase Revenue?  Are you Creating Efficiency?  Is your Firm Continuous?  All 3 are competitive advantages if you score high.  All 3 represent risk if you score low.  Your benchmark score (benchmarked against Australian Law Firms) is an indicator of what you may need to focus on to put your firm on top.

The tool is available online and for free for a short time here.

 

To your success,

James Vickery

James-Circular-150x150

About the Author: James Vickery is the founder and CEO of I Know IT, a transformative IT services provider. James connects law leaders to their strategy through technology with a firm belief that lawyers must re-enter their profession as innovators, thinking and acting as technology companies do in order to survive, compete and prosper in a digital economy.

James enables this new way of thinking and executing through consulting, coaching and delivery of technology solutions to Australian and international organisations. .

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