information management law firm blog

Around 75% per cent of the incentive for choosing one lawyer over another is linked to service delivery, and only 25% to technical/legal expertise. In most situations, clients will already expect a lawyer to know his or her law, so in choosing a lawyer, the level of service will nearly always be more important.[1]

As clients increasingly focus on the quality of a firm’s service offering, virtuosity and expertise are becoming less marketable. In order to stay competitive, the onus is now on law firms to provide value-added services. There are three key elements to this new focus: quality of communications, speed of information access, and cost transparency. All three are directly affected by a law firm’s information management practices – and by how digitally savvy they are.

Firstly, clients expect correspondence to be meaningful. Law firms still relying heavily on paper-based information management are less capable of efficiently aggregating important data and providing that data in a format their clients can access. Even for firms with well-connected online workflows, digital is not an automatic boon because it is often poorly optimised. “IT is grafted onto existing working practices and so replaces or perhaps enhances current systems,” notes a 2015 study by the CJC. “This approach tends to be costly, difficult, and, in the end, often delivers ‘mess for less’, that is, it replaces today’s inefficient, paper-based processes with IT-based systems. It does not fundamentally change the underlying processes and procedures.”[2] Delays that were once the result of a lack of automation are now caused by a dearth of information that is indexed poorly, or not at all. Information management industry experts claim that as a result law firm staff can still spend up to 30% of their workday chasing down documents.

Difficulty with digital also means lawyers are preventing from corresponding on the fly across multiple devices, causing them to spend more time issuing requests for the physical transmission of files. This adds to the cost of discovery and diminishes recovery rates. Clients notice the speed with which their legal counsel operates and make hiring choices accordingly.

In addition to this, there is increasing sensitivity over the amount, and manner in which, clients are charged for information management–related expenses. Ethical standards and professional conduct rules make it clear that law firms must not charge for the storage and retrieval of documents without obtaining their clients’ informed consent, and violation of this is a serious disciplinary matter.[3] “If you are being sold scanning or archiving services on the basis that these can be automatically billed to the client under a “standard” costs agreement, such claims need to be considered carefully,” warns ethics solicitor David Bowles.[4]

The storage, access, digitisation, auditing or archiving of client information is typically regarded as part of a law firm’s internal processes, and therefore unbillable. However, there are certain information management tasks performed in service of clients, such as scanning documents to make them accessible remotely, whose costs might be more easily externalised. Lack of clarity in this area can cause firms to unnecessarily refrain from outsourcing their files, accrue costs they could be passing on, or overcharge their clients.

As a law firm migrates to digital, the best information management companies provide intuitive systems that allow workers to access information in any format they wish, from any device. Digitisation makes information available in real time, providing immediate access across the business to the most up-to-date versions of documents in a fast, secure, cloud-hosted system. An information management partner with a good understanding of legal sector billing practices will also allow firms to set up sub-accounts within their system for each case, so storage and retrieval costs can be itemised in an easy-to-digest format during billing. They will also be able to help law firms establish which of their information management costs can be ethically externalised.

The increased efficiency that comes from better information management has a very real dollar value. In terms of discovery, a more streamlined and intuitive electronic document access system naturally increases retrieval speeds. For physical documents stored off-site there may still be a wait time, but this is almost entirely taken up by the transit process, and no longer by staff searching in vain for files. With document retrieval outsourced, staff can get on with more productive tasks. Clients will also be happy, assured that any costs they incur for third-party information management will be billed transparently and ethically.

Find out more in Grace’s FREE in-depth information management report for government agencies – available exclusively at www.grace.com.au/information/legal

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[1] Queensland Law Society, Client Care: Communication and Service, p. 8.

[2] CJC, Online Dispute Resolution for Low Value Civil Claims – Online Dispute Resolution Advisory Group (Report, CJC, 2015) p. 4.

[3] Legal Services Commissioner v Rose (No. 2) (Legal Practice) [2007] VCAT 2466 (17 December 2007)

[4] Bowles, D., Can I bill my client for archiving and file retrieval costs?, Queensland Law Society Ethics Centre, (January 2016)