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SUMMER 2015 EDITION

Forefront
 

Automation Tools Are Critical Enablers of BPM

As law firms work to implement and master their business process management (BPM) initiatives, automation technologies are considered a critical enabler. Historically, firms have largely implemented process automation through their core legal applications and embedded workflow features in such areas as practice management, document management, or time and billing systems. These workflows were often disparate and disconnected, focusing on specific processes. They accomplished a specific purpose but did not deliver benefit from a more holistic and integrated approach to process optimization.

While these legacy systems continue to exist, many law firms are beginning to adopt enterprise-oriented solutions. Over one-fourth (27%) are now using an enterprise BPM solution, and an additional 38% are resorting to a customized approach.

While firms have used process reengineering and automation before, these previous efforts have been generally focused on single processes, practice areas, or offices. In contrast, the emerging BPM trend has firms looking at how they can realize efficiency and quality benefits – and corresponding cost savings and revenue optimization – by considering processes on a firm-wide basis. With concepts borrowed from corporate management practices, such as collaboration, shared services, and outsourcing, law firms are taking process innovation seriously.

Our ongoing research in law firm operations clearly supports the view of enterprise BPM as a critical core function for optimal law firm operations management and risk mitigation.

Importantly, as firms look at their full collection of operational processes, they are thinking beyond the systems that support the discrete parts of the processes. Instead, they are looking for how the processes should optimally flow and how the broader collection of systems (and system users) can support them. Rather than have the processes dictated by the systems, they are looking for ways that the process can function independently from system limitations and align with the systems supporting the process. As case in point, our 2013 survey on the topic of workflow and automation found that 50% of firms will be upgrading their existing new business intake (“NBI”) systems (Fig.1).

Fig.1 Systems Used for Workflow and Business Process Management
Source: Hyperion Research Insights Survey, 2014

Meeting the Unique Requirements of Law Firms

While the capabilities of an enterprise BPM solution are attractive, there are a number of unique law firm-specific considerations that must be closely evaluated. In working with our law firm clients and the legal community, we have identified the following special law firm factors:

Legal Practice Guidelines – As a closely regulated industry, the legal profession is bound by a myriad of rules and restrictions on how their business must be conducted, all of which must be considered in designing, implementing, and using automated work processes. These include such areas as lawyer-client privilege, privacy and confidentiality, HIPPA, unauthorized practice of law, intellectual property controls, court / judicial rules, electronically stored information, etc.

Practice and Office Organization Structures – Although law firms are beginning to function more like corporations, their legal, business, and operational structures remain more highly segregated than corporations. While process automation can remove unnecessary barriers, certain separations are important, desired, and in some instances, legally required.

International Practice Considerations – Law firms are increasingly extending their international reach, either formally through global offices, or less formally through affiliations and co-counsel work arrangements. The international dimension has its own unique legal practice rules and organization structure considerations, including multicurrency requirements, OFAC, and money laundering regulations, and their associated processes.

Accounting and Financial Controls – Unlike other businesses, law firms have unique and stringent accounting and financial regulations that drive special considerations in managing certain processes. Client funds, expenses, billings, fee arrangements, etc. all require particular handling in the law firm context, including potential differences on a state-by-state and country-by-country basis.

Importance of Microsoft Technology – The legal technology market, and particularly law firm technology, is dominated by Microsoft® software. While non-Microsoft applications exist (e.g. Java EE-based solutions), BPM solutions based on the Microsoft platform and with tight integration to the Microsoft Office Suite have a significant advantage.


Hyperion

Hyperion Global Partners is a premier global consultancy to legal and professional services organizations. Hyperion Research group provides independent market research and advisory services, including unparalleled insight to the leading trends in legal strategy, operations, and technology. The company works with law firms, law departments, and other legal services organizations to make intelligent, fact-based decisions about how to improve their operational performance. It also works with solution providers, including software vendors, professional services groups, and consultants, to better understand the latest market trends and the needs of their customers. Click here for more information.

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