Finance and tech: a match made in heaven?
It seems there is no conversation among legal business management leaders that doesn’t include at least one mention of technology. And with 82% of those leaders saying their firms have moderately or significantly increased technology spend in 2024, according to the latest Briefing/HSBC UK report, it’s safe to say that its popularity within the legal sector will only grow.
While legal tech promises an increase in efficiency and productivity, implementing more solutions also brings brand new challenges to the table for all legal business management areas, including the finance function. These problems were the main theme of discussion among several CFOs and FDs who attended one of Briefing’s recent roundtables in October, co-hosted with expense management specialist Emburse.
The price is right — or is it?
Among the top challenges is the pricing conundrum — how do you price your services accordingly, as automation and technology become more embedded in legal work?
This is something that finance leaders are still trying to grasp and solve. Several attendees noted they’re still struggling to “work the science around pricing” to pull themselves up the value chain, to ensure they consistently price work properly — and even with being willing (even happy!) to turn down unprofitable work.
Picking the best tool for the job
Another key challenge is choosing the right solution from the myriad available in the market — a job that can sometimes be made harder by IT teams who may not grasp the specific tech needs of a lawyer. Things also become more complicated for firms that do not have a traditional hierarchical structure, as one expert claimed most solutions available in the legal market do not cater to these particular firms.
While there’s no one-size-fits-all approach, everyone agrees that it is essential to understand the law firm’s, and individual lawyers’, goals and needs to identify and procure the right tech solutions for them. However, one expert noted that firms do not necessarily need to chase the ‘best’ or most cutting-edge technology to achieve a boost in productivity and efficiency, arguing a sub-optimal solution might actually be more beneficial if it works best for the law firm and its lawyers.
Selecting the right tech tools for your firm also brings another burning question — is it better to pick a one-stop-shop provider, or fit multiple smaller tech solutions “around the edge” to complement a law firm’s existing primary? system? Once again, no one “right way” was identified — although a tendency to gravitate towards the latter option was noted.
Smartphones: a useful productivity tool or an ethical trap?
As the discussion revolved around different solutions currently in use, one particular tool emerged as a popular choice: none other than the good old mobile phone.
With several lawyers using these devices for various activities, such as billing and time reporting — especially when it comes to the younger generations, who are more phone and tech-savvy — finance leaders noted that mobiles can be useful tools in a law firm’s tech arsenal. They could also prove valuable in the hunt for data, particularly ESG information collection, such as using a phone’s GPS tracking to calculate a lawyer’s carbon footprint.
However, this also brought potential dangers into focus and reinforced the need for lawyers to have a separate work phone in case of an audit. Moreover, using mobile devices for ESG data collection could potentially become an ethical trap, if law firms cannot find the balance between getting the data without becoming Big Brother.
The ESG hunt
The versatility and convenience of phones for carbon footprint data collection then steered the conversation towards the topic of ESG more generally, and how technology can help firms accurately and efficiently report their ESG data. Leaders agreed that tech tools offer a massive opportunity for their suppliers, particularly those developing AI tools.
However, not all firms represented have ESG as a priority on their agenda, with some still viewing it as a tick-box exercise. One expert claimed some may soon face the day of reckoning, as clients are becoming more focused on ESG — thus making it more important for firms to report reliable stats — and the impending regulatory wave will eventually hit.
As ESG grows in importance, data collection and reporting will become a bigger task, and one that is not solely for the operations function to solve. Finance also has a key role to play, and must collaborate with operations team to make it happen.
This brings one more question to the table: is the CFO role now turning into a ‘chief value officer’ position as finance leaders take on additional operations responsibilities — particularly in firms without a formal COO? While the finance leader certainly already does more than number-crunching, the chance of this wider evolution remains to be seen, and may take a few years to come to fruition.
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