Billable hours have increased but many small/mid-sized law firms are still behind the times with technology.   The industry also suffers from being risk adverse, whereas the belief of internal controls over processes, files and data is believed to be more secure in the office.   However, this mindset is wrought with inefficiencies, higher costs and less secure.

Thomson Reuters released their 2024 Q1 Law Firm Financial Index (LFFI) which shows fees worked went up 8.3% over 2023 Q1 and productivity expanded, increasing both revenue and profits by approximately 5%.  The firms which experienced the highest expansion had a 4% increase in technology spending which was the fastest expansion in Reuter’s history of reporting this data. However, mere spending more on technology doesn’t necessarily produce better results.  Small/Mid-sized firms still lag in technology spend and are often caught in the dilemma for fear of data risks vs. the increased cost of new technology.  “If it isn’t broke, don’t fix it” partners are often quoted.  But it becomes a catastrophe when it does break!  Often times, the recovery can be weeks!

Actionstep, in its 2024 U.S. Midsize Law Firm Priorities Report indicated a majority of the barriers to technology investment stem from fear and not always rational.  Only 8% of the respondents stated their firm has no barriers to technology adoption.

This lack of action on behalf of small to midsized firms doesn’t come without a cost.  Many mid-level associates/professionals stated the following challenges:

• Difficult to attract and retain new staff.
• Longer times to complete administrative activities.
• File sharing challenges and version control.
• Difficult support when working remotely.
• Difficulty retaining in-house technology talent and support.
• Increased cyber threats.

IT Managed Services is enabling small/mid-sized firms to have the use of state-of-the-art technology while better controlling costs, improving service and security.  Many law firms of less than 500 employees, may have an IT department of 2-5 people.  Some firms of less than 20 people may be supported by a single person or an independent contractor working from their house!  In today’s environment employee turnover is high of younger support staff and long-term IT staff can be holding the firm back from advances in new technology and greater exposure to cyber threats.

Historically, many firms also relied on internal servers for file storage for fear of data loss and control.  This is no longer the case because evidence has shown internally managed data storage is at far greater risk of loss and corruption than that which is professionally managed off site.  IT Managed Services is enabling small/mid-sized law firms to become more efficient and resilient to cyber threats.

Not every IT Managed Services Provider (“MSP”) is the same.  Small/Mid-Sized Law Firms prefer personalized attention.  Afterall, that is how they serve their clients!  When selecting an MSP, it is best to keep in mind the following questions:

• Do I have the same points of contact serving our firm?
• Do they look at future risks I may be facing and protect me?
• Do they manage all my assets and alert me to planned investments and upgrades?
• Do they meet with our leadership to address future risks and issues?
• Do they help mitigate risks and lower insurance costs?
• Are they reliable and responsive to keep our professionals connected and working remotely?
• Do they manage on-boarding and off-boarding of professionals so it is hassle free?
• Can they scale and adjust to our firms growth both by staff and geographically?
• Can they proactively manage my technology operating expense to stay within a budget?

IT Managed Services is a key enabler for small/mid-sized firms to be protected and more profitable.  Sagin, knows this because we specialize in serving law firms and do it every day 24/7/365.  If you would like to receive an IT risk assessment and evaluation regarding the economics, you can email us at info@saginllc.com or call +1.312.281.0290.

Sagin, LLC is a management consulting and IT managed services firm which provides full service 24/7 support of small to mid-sized (10 – 1,000 employee) organizations including help desk, infrastructure, server/cloud management, data security risk mitigation, due diligence and strategic planning support.