Study reveals lack of technological nous could waste
weeks of fee-earner's time every year
10th October 2013
Study reveals lack of technological nous could waste weeks of fee-earner's time every year
- 76% claim their lack of knowledge wastes 'significant firm time'
- Only 11% of firms offer training for new technologies
- Automated process can save up to 50% compared with legacy methods
A new study by legal and tax & accounting information solutions provider, Thomson Reuters, has revealed that law firms could be needlessly wasting hundreds of hours each year and miscalculating tens of thousands in billable time because of a lack of specialist training and adoption of new technologies.
More than 80* senior fee-earning legal practitioners in medium-large practices were questioned in research in August 2013, commissioned to help Thomson Reuters understand how law firms use practice management and research technologies.
A lack of knowledge was a common trend, with just 11% claiming their firm offered formalised training for newly adopted technologies. Only 17% said they got the most out of the current workflow and research tools at their disposal and the majority (76%) claimed this had a negative impact on their time efficiency.
A large number of professionals also rely exclusively on 'manual' processes for day-to-day tasks, despite fully-automated computer-based processes being available, including workflow management (41%), legal research (38%), tracking billable time (37%), client cost-ledger (35%), document management (31%), and document production/assembly (19%).
Conversely, the survey highlighted the potential time savings offered by fully automated solutions, including workflow management (50% average time saving compared to the manual process) legal research (50%), document production/assembly (50%), tracking billable time (25%), client cost leger (25%) and document management (25%).
The top reasons for this lack of adoption emerged as greater trust in 'traditional' legacy methods (43%) and technophobia (32%) from users.
Miscalculation
The study also highlighted a number of other issues impacting a firm's potential profitability due to lack of technology. Of those professionals manually tracking billable time, 56% admitted they generally underestimated their hours. This is compared to just 18% of those who fully automated the process. And, with an average inaccuracy of 30-40%, there is some serious billable time being lost.
The same can be said for manually tracking client cost-ledger, with 50% of firms underestimating 'recharge' costs, by an average of a quarter. The research also highlighted a dearth of fee-earner time analysis, with just 21% of firms analysing fee earner's figures on a monthly basis. 16% did this every six months, 37% yearly, while 19% never did it.
Carl Olson, Commercial Director of Thomson Reuters Legal, Tax & Accounting ANZ, comments: "It's surprising to see so many firms still relying on so-called 'manual' processes, despite the availability of proven and trusted time-saving alternatives such as online research portals and sophisticated practice management software. In some cases this costs time, but when a fee earner undercharges their hours, it's a case of directly losing money. Firms that fail to adopt new technologies leave themselves open to being less competitive than those that do."
How much is this really costing?
- Underestimating fee earner's time by 40%. Based on a typical senior solicitor's charge out rate of $300 per hour, this equates to a potential $20,000 a month in lost revenue. Based on an average partner's hourly rate of $800, this rockets to more than $51,000 a month.
- Document assembly time savings of 50% with automated solutions. According to recent research, taking instructions and drafting one of three types of common legal document takes an average of 86 minutes**, meaning automated solutions could save 46 minutes. Based on producing just three documents per week, a senior solicitor could be wasting $2,760 each month in lost billable time.
For media enquiries, contact Lewis Khan on lewis@rinsed.net / 0423 665 628
*Study questioned 80 senior staff/partners across medium-large law firms in Australia. Detailed research breakdown and case studies/law firm testimonials are available on request.
**According to a 2011 study by LegalFutures
Thomson Reuters
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