Chapter 5 - Management and Personnel Technology Considerations

Return on Investment

Return on Investment. The advancements to integrate into your practice must be planned for and implemented on a firmwide basis. This requires a constant reassessment of the technological advancements. For example, some important goals for your firm may be to increase and promote communication with your clients, increase productivity using document assembly software, or increase effectiveness in litigation by investing in multimedia presentation software and hardware. It is necessary to attempt to measure the benefits of implementing technology into your firm. It is not sufficient to say that the new technology will improve this or eliminate that. Instead, technology expenditures should be linked to a strategic plan where certain goals and measurable benefits are set forth.

A cost benefit analysis may be difficult to quantify, but efforts should be made to create a causal connection between the expenditure and the benefits. For example, if laptop computers are purchased, will it result in more billable hours? If desktop systems are installed in an attorney’s home, will the attorney self-train himself and bill more hours? Does a remote connection to the attorney’s home provide more billable hours since they will not have to commute? At a system wide level, will the use of computers decrease the number of support staff needed?

Keep track to determine if your firm has met its goals, timelines, and project dates. The staff should be advised as to the benefit obtained from the use of technology.

The important point is to ensure that the functions you automate bring real value to the firm. The technology investment in dollars will be significant both in training and the actual hardware and software investment. This investment should be tied to a return of investment measured in client retention, client attraction, efficiency, cost savings, lowering of overhead costs, competitive advantage in cases, and so on. Focus on measuring, if possible, the Return on Technology Investment (ROTI).

This should encompass productivity gains, expense reduction, and recovery of costs. If you can show that a contract was prepared in minutes instead of hours, then this is a significant productivity gain. If the electronic transfer of contracts and other documents can reduce express mail charges, then track these charges. There is software and hardware technology available to track the costs of faxes, copying, printing, and telephone charges to the client. Track not only the tangible benefits, but also the subjective benefit to clients.

Billing for Technology. Clients have gotten use to being charged for faxes sent on their behalf, but what about the cost and overhead for images, CD-ROM legal research, desktop faxing, databases, or creating an extranet? How does a firm charge or pass along the costs for implementing technology on behalf of all clients or specific technology projects for certain clients.

One of the critical factors is to sit and discuss these issues with your clients. Clients are generally well aware of the technological changes going on and can intelligently understand the use of technology in a firm. If explained to them on the basis of the benefits the clients will derive for the money expended, then a solution can be worked out. Whether the benefits are in the long run fewer billable hours, faster service, or whatever the technology provides, then both parties should be able to derive benefit for the implementation and funding of the technology.