Nasstar take a humorous look at the idea of an IT profit centre in a law firm
The Boss, that’s the firm’s new Managing Partner & Director of Change (the Head of Marketing & PR managed to restrain him from adding ‘Evangelist’ to his business card) calls me in for a one-to-one meeting to discuss a “Bold New Initiative” (his capitalization, not mine – always a bad sign) for the IT department.
We sit opposite each other playing boardroom roulette – who will be the first to lose their nerve and remove the cellophane from the plate of biscuits lying on the table between us (it won’t be me, I had a Snickers bar just before the meeting) – as he outlines his thoughts. “The Partnership,” has says, “are concerned at the IT department’s growing budget. And I have to agree with them. We spend a disproportionate amount on annual licences, upgrades and support costs. It really is an expanding cost centre and…”
Pregnant pause for effect. “And,” he continues, “I’d like to propose a Bold New Initiative (the capitalization again) to turn the department from a cost centre into a revenue generation profit centre.”
I keep the smile on my face (I’ve been playing partnership politics for long enough to know the rules of the game) but deep down I’m screaming. I realize now where the artist Edvard Munch got his idea for his painting The Scream – he worked in IT and had to deal with non-tech literate managers. I also know what is coming next. Every change of managing partner, we get the same thing, usually after they’ve come back from a conference where they’ve been listening to some motivational guru!
“Anyway,” says the Boss, oblivious to the by now rictus grin on my face, “instead of paying out all this money to software companies, we should develop our own software. We wouldn’t need to start from scratch as we can use all these industry standard platforms like Microsoft SharePoint and Dynamics. Not only will it be a cost-saving in the short-run but in the longer term it will be revenue generator. We’ll be able to sell the software to other law firms (brace yourselves, here it comes) because it will be software developed by law firms for law firms!”
I nod in agreement. “Good idea. No, an insanely great idea as Steve Jobs once remarked,” I reply. (Well I’m being honest about the insane bit.) “I’ll start drawing up some budgets for the development staff, trainers and helpdesk people we’ll need to hire. I’ll also have a word with Business Development and Marketing & PR about advertising campaigns and hiring sales staff. And, if you can have a word with some of your fellow partners about IP and product liability issues, that’ll take care of the legal side of the picture.”
“Extra staff?” the Boss bleats.
“Oh yes, we’re actually understaffed at the moment, the only reason we are not at full complement is we’re unable to offer a sufficiently attractive and competitive package to new recruits. Conservatively, we’ll need to triple our development team. Plus recruit staff to provide support services to all our new law firm customers – and we can’t scrimp on that because you know how litigious law firms can be when they have software issues. As for the sales and marketing side… well the salaries and commission some of them earn but partners in the shade.
“Still,” I continue, “once all the R&D has been completed, along with final beta testing, we should be in a position to take the product to market in around five years’ time. And then, assuming anyone actually wants to buy our software in preference to the established products already out there – and we can be pretty certain the competition will be offering some very attractive discounts to ensure they win any deals going – we should be home and dry and living in the land of Milk and Honey.”
“Five years?” says the Boss, who I know is planning to retire in four years’ time. “But won’t building our systems on something like SharePoint or Dynamics speed up the development process?”
“Theoretically,” I reply, “but as we don’t use either of those products in this firm, we have no inhouse expertise and so need to recruit people who do. The other issue is every time Microsoft introduces upgrades to those products, we will have to change and rewrite our system. It’s called the Tail Wagging the Dog.”
“Oh,” says the Boss, throwing all caution to the wind and tearing the cellophane from the plate of biscuits. He goes straight for the chocolate ones, I notice.
“Listen,” I say, all charm and reasonableness, “I totally understand the pressures you are under and I recognize the ‘IT is a cost centre monster’ argument. But, you are looking at the issue from the wrong direction. Let’s take a for instance... One of this firm’s biggest costs is lawyer salaries. Now if you shed 50 percent of your lawyers, you would slash your overheads overnight and that would make you more profitable?”
“But only in the very short-term,” replies the Boss, “because we wouldn’t have the people to service our clients and undertake the work on all our matters. We’d soon lose clients and business.”
“Exactly,” I reply. “Because all those lawyers are not a cost centre but a necessary investment by the firm to make money, by increasing revenues and profits. It is one of the inescapable costs of doing business. It’s the same for IT. Pull the plug on tech and all those services clients are demanding these days by way of greater transparency, electronic billing, better communications, online portals to access and monitor matter progress, workflow automation, KM sharing, never mind all this AI hype. All this stuff starts falling over and you are left with unhappy clients who will vote with their feet. And you are certainly not going to win any new business if you are in the fountain pen and postage stamp era.”
“So…” says the Boss, as he rolls the concept around his head. “IT is not a cost centre to be viewed in a negative light but something positive – a necessary investment for doing legal business in the digital age. Yes, I like it. In fact I think I’ll make the topic of a presentation I’m giving at an upcoming conference on law firm innovation.”
You got to hand it to the Boss, he knows how to roll with the punches. No wonder he made managing partner!
* The fictional protagonist of this story is an industry veteran, which mean he’s old, been around the industry for years but kept his nose clean, not been involved in any major implementation disasters, and not taken to drink. (This is in contrast to an “industry legend” who is old, been around the industry for years, forever getting into scrapes, has lurched from one implementation disaster to another, and drinks enough alcohol to single-handedly keep a small brewery in business – but does it all with such style and panache that they still get away with it!).