Large firms' IT bills hit 6m

IT SPENDING: solicitors developing their own software when it's cheaper off the peg

Large and medium-sized law firms splashed out an average of 6 million - or 5% of their turnover - on IT systems last year but their spending is likely to be static in 2003, a survey has revealed.

The poll of 60 firms by accountants RSM Robson Rhodes - unveiled at the Solicitors 2003 IT conference in Birmingham last week - showed that the average spending was 3.8 million on IT operations and 2.2 million on development in 2002, leading to an average cost of 5,000 per end user.

However, although development spending is expected to rise by 9% to 2.4 million this year, firms' operational budgets will be down by slightly more than 5% to 3.6 million.

The lion's share of funding in 2002 - 26% - was allocated for IT staff, followed by 20% on software and 17% on hardware.

Digital dictation, knowledge management and disaster recovery packages were the most popular with firms.

Three-quarters of respondents said they looked at productivity levels as a way of assessing whether the spending was successful, with 36% benchmarking with their peers and 28% looking for return on their capital investment.

Emerging trends included more firms developing their own software and looking for global data management and reporting, while 30% of respondents expect to set the wheels in motion for a globally integrated IT system by the end of the year.

Using IT to promote flexible and mobile working was another objective.

In terms of strategy, firms said they would be looking to make efficiency gains, assess their projects more closely and use IT to differentiate themselves from others in the market place.

Speaking at the conference, Derek Southall, head of strategic development at Birmingham firm Wragge & Co, said he was 'horrified' that firms were spending as much as 5,000 per head on IT as it indicated a case of 'technology for technology's sake'.

He particularly criticised firms for developing their own in-house software when it would be cheaper to buy what was already on the market, and advised them to concentrate on investing in case and knowledge management, which would produce better costs savings.

Mr Southall said disaster recovery should also be a focal point, as risk assessment was likely to have an increasing impact on insurance.

'Given the state of world affairs, that should be pretty high up firms' agendas,' he added.

Paula Rohan