Firm Management

When Is Its Time to Call in the Consultants?

By Tom O'Connor

LAW FIRMS constantly ask if they need to use a consultant. It may seem counter-intuitive, but it's often not a good idea to hire a consultant.

Rather, wait until you have performed several functions in-house. Specifically, three things: 1) develop a strategy, 2) prepare a budget and 3) chart a timeline.

Strategy

Whether you're buying software, purchasing new PCs or upgrading an entire system, you need a strategy before you hire someone. How do you develop such a plan or overview? Start with general questions:

1. Where is the firm heading?

2. What do you want your practice to look like in two years?

3. Does this purchase fit that vision?

Objectives should progress from the very general to the specific as a plan is developed. The overall goals should always be improvements in productivity, efficiency, and quality. Identify actions that are needed to implement these goals, e.g., does new equipment speed up input, reduce the cost of gathering and using data, and allow the firm to use less staff?

That is not to say you can't engage a consultant to help you set your strategy. The best way to begin the process of setting goals is simply to ask your staff what they think. A good needs assessment survey can be developed and deployed by a consultant but do not engage someone long term until you know what your goals are.

Budget

Don't overlook this step. Without a budget you will inevitably buy more than you need. Buying piecemeal without an overall budget makes each individual purchase seem acceptable; only later will you realize the full extent of your expenditures and the waste involved in unnecessary purchases.

The mere exercise of putting figures down on paper will force you to make decisions as to what is really necessary. This is not fun stuff. It involves research, number crunching and tedious attention to detail.

Always include amounts in your budget for training, support, and maintenance.

Training should be arranged through your consultant at the end of the process but don't forget to budget for it -- training is essential.

Keep in mind that the lifetime cost of maintaining the average computer is typically four or five times the cost of purchasing the computer: don't forget a maintenance contract.

Timeline

The most common mistake after failing to set a budget is trying to do everything at once. You rush to install new word processing software with document assembly and a document management system plus add a litigation support system. You buy new PCs for support staff and laptops for the attorneys. You acquire software to input billable time and link it to your general ledger. Suddenly, you're practicing computer management, not law.

Take things one step at a time. Avoid piecemeal purchases. Set specific timed stages for pilot projects to bring in new equipment and/or software. Then train your users and see how everything is working before moving to the next area.

Don't work with too many different vendors. The time needed to coordinate multiple vendors will result in loss of time. Yes, doing things in incremental stages will take longer, but the time you save by getting users up to speed and working productively is worth it.

Here's When to Hire

If you are a busy firm (and hopefully you are) or are not confident about technology, or if your situation is very complex, this is the point at which you engage a consultant.

Take the time to find a good one. Look for someone with legal specific experience and ask for references. Then call the references. You might also try contacting a national organization such as the American Bar Association's Law Practice Management section or your local or state bar law office management assistance programs for advice on consultants.

Many vendors also offer consulting services. Avoid using any consultant or consulting agency that sells hardware or software in any type of exclusive relationship. Some may charge nothing for their consulting time but try to make it up in the margin on the products they sell.

Because the margin on hardware is extremely small, this suggests little "consulting" value will be provided.

Fees

Expect a consultant to charge a flat fee nearly equivalent to the amount being spent on software and hardware, or bill at an hourly rate close to that charged by the highest associate in the firm.

Of course, the actual cost of the consultation will ultimately depend on the number of decision makers involved.

When the number of people involved in the decision-making process is limited, the cost is lower, so have the consultant report to one person.

Decision-making

Decision-making by committee is a sure way to avoid making decisions. Form an advisory committee but leave decision-making in the hands of one person who is well advised and prepared to make the decisions.

By having that person implement a budget with specific time lines and reporting to the managing partner, firm administrator, or board of directors (depending on firm size), you will be far more effective in achieving your goals.

Tom O'Connor is director of education and training, at Seattle's Pacific Legal Litigation Support Services. He is an emeritus member of the LTN Editorial Advisory Board.