Software solutions - oak trees from acorns

In the previous column, we looked at some of the reasons why the installation of an IT system is unlikely to generate a 'big bang' increase in turnover or profits.

However, many firms are now finding that one way to realise an acceptable return on investment is to look at the cumulative effect of minor improvements in productivity and fee-earning capacity.

In the same way that oak trees grow from small acorns, so these micro, rather than macro, economic gains can still represent a substantial benefit for a law firm.

By 'minor improvements', we could be looking at something as apparently inconsequential as saving just five minutes of each fee-earner's time each day.

For example, most lawyers actually spend a frightening amount of time doing what can only be described as faffing about with files and bits of paper.

You need to locate the files for your next appointment.

You need to make some attendance notes and put some reminders in your diary or to-do list after that meeting.

Then you need to refile those papers and notes before going on to locate the file for your next meeting and start the whole process over again.

But if a new case or workflow management system can automate just some of those routine administrative tasks that take up your time and so free fee-earners to charge an extra five minutes of time each day, the potential benefit could be enormous.

With only 20 fee-earners and an average charge out rate of 100 per hour, this alone equates to nearly 38,500 in extra billable time each year.

If you are a major commercial practice and reap a similar improvement across large teams of high-earning lawyers, then those extra few minutes could easily be worth hundreds of thousands of pounds more during the course of a year.

It is also worth noting that a saving of five minutes probably errs on the side of caution.

One study published a few years ago suggested that as much as 40% of the average lawyer's day was spent on routine administrative tasks of negligible charge-out value.

This may seem extreme but it is worth noting that while the average UK high-street firm fee-earner spends about 1,600 hours in the office during the course of each working year (assuming seven hours a day, five days a week for 46 weeks a year), the amount of chargeable time actually racked up is between just 1,200 and 1,300 hours.

If just some of those missing 300 to 400 hours could be turned into billable time, the fortunes of many law firms - and lawyers - would be transformed almost out of recognition.

In the next issue, we will start looking at how much firms should be spending on IT and the dangers of trying to trim budgets.

Charles Christian is an independent adviser to the Law Society's software solutions guide