Five trends affecting legal CIOs

The ongoing economic instability plaguing developed economies has impacted many vertical markets and the legal sector is no exception. Law firms need to innovate and grow despite reduced demand.

Although these changes do potentially represent risk to law firms, they also offer the savvy legal CIO a tremendous opportunity to use technology to create competitive advantage.

Here are five trends that CIOs at law firms should be keeping an eye on this year if they are to help their firms improve productivity and profitability.

Alternative fee arrangements

Clients are becoming more sophisticated in their buying practices across the legal industry and alternative fee arrangements (AFA) are one example of this trend. They are asking for more complex and detailed billing structures, a shift away from the hourly billing model.

This means that law firms need to provide accurate, reliable and scalable reporting to effectively manage AFAs and other complex billing structures.

Using a comprehensive practice and case management system can accurately analyse these client requests and price AFAs accordingly, while also providing in-depth billing reporting.

This can become a competitive advantage for proactive law firms responding to client demands for more certainty and control over their legal spend.


Despite having one of the largest smartphone adoption rates globally, Australia’s official support of the bring-your-own-device (BYOD) trend has not aligned with some of the more developed countries.

Take up of BYOD in the legal sector has been even lower, partly due to resistance from the industry itself and partly due to client concerns around security.

Although every company has their own perspective on BYOD, there are two shared concerns: internal data security and the security of their client’s information.

Australian CIOs realise benefits of internal BYOD programs to increase staff productivity by providing a more flexible work environment.

But how do CIOs manage employee preferences to allow BYOD with their client’s preference to not allow BYOD? There’s an opportunity here for CIOs to create and demonstrate secure systems that provide comfort to clients that their data is always protected. This may even drive new business.

Mergers and acquisitions

In 2012, there were 96 cross-border mergers in the legal sector, substantially more than in any prior year.

Merged organisations operating across multiple geographies are at risk of experiencing IT system latency issues. This system lag not only creates user frustration but the latency can trigger synchronisation and database errors so having a proper IT architecture is vital.

For the CIO, the ability to integrate financial and operations systems of the two (or more) firms is critical to achieving the expected benefits of the merger.

Other challenges include time zone conversions, currency translations, compensation modelling and equity valuations. Ensuring accurate costing, billing, CRM, case management and full tracking is essential in the current business environment.

The opportunity is in positioning the firm with the information systems technology sophistication to easily integrate into another firm’s data and operations. Firms that possess this level of IT infrastructure become more valuable merger partners.


As globalisation proliferates, there will be increases in trade openness, financial integration and governance. Law firms that deploy practice management systems based on leading industry standards and tools are best positioned to scale for growth and profitability in an increasingly globalised marketplace.

Rapid changes to the global economy, legislative arena and the technology market now require law firms to react and transform at an ever quickened pace.

Just as many corporations based in developed economies have been making investments in the Asia Pacific and other lower cost regions, so too have their law firms in response to the pressure of expense control. A growing number of firms have moved parts of their support and other functions to lower cost locations.

Typically, these ‘remote’ operations begin as centres for back office administrative and support functions that do not need to be physically located in the head office.

However, they often quickly grow to include a wide variety of other activities, sometimes including litigation support, basic document drafting and some legal research.

To maintain client service levels and profitability, legal CIOs looking to expand globally must maintain critical functionality from their IT infrastructure.

Managing a global law firm demands the ability to be nimble and apply management uniformity and flexibility across multiple currencies, regional calendars and time zones.

Each office may also have its own tax requirements as well as linguistic and cultural norms to be supported, reconciled and consolidated to the controlling entity. Again, information system sophistication and flexibility will either support or hinder the global expansion of a law firm.

The cloud

Law firms have lagged in adopting the cloud trend for a few reasons. Firstly, they fear of losing control over applications and security. Secondly, few CIOs look forward to moving their on-site systems to an external cloud.

Thirdly, a lack of vendor options is a deterrent, alongside the security concerns understandably held by CIOs. This situation is currently changing and with new accreditations out such as the STAR Cloud Security Alliance, security credibility will grow and adoption will ultimately increase.

The cost savings and IT flexibility benefits will ultimately drive more law firms to the cloud. Firms not ready for that conversion today should seek systems that are ‘cloud ready’ and can be easily converted at a later date. The cost benefits of the cloud can become significant drivers to future profitability increases for law firms.

To maintain and grow profitability, law firms must adapt to ever changing market conditions and dynamics. The growth of AFA and increased security requirements demanded by clients are only expected to increase.

Mergers, cloud based infrastructures and continued globalisation will continue and add complexity and cost to their operations.

However, firms that have a CIO who embraces information systems and technology to proactively manage these changes will position themselves with a competitive advantage to profitably grow, manage and protect their firm.

The CIO holds the key to an innovative and positive year for the legal industry in 2014.

Nick Dunford and Monica Le-Nguyen are senior executives at legal software provider Aderant.

Copyright © 2014 IDG Communications, Inc.

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