Am Law Tech Survey 2009

CIOs are trying to persuade their reluctant bosses to consider more cost-efficient, cutting-edge tools

Like a bad Hollywood thriller, law firm technology has a villain that's all too easy to spot. The economic downturn has -- to no one's surprise -- taken a toll on the coffers of law firm IT departments: Fully one-third of the 110 Am Law 200 firms participating in our fourteenth annual survey of technology directors reported that their capital budgets were down more than 10 percent this year. Staffing levels and salaries have taken hits, and equipment purchases and software upgrades have been put off. None of it is happy news. (Access all the charts in our survey from the links below.)

"When I proposed a budget similar to last year, it was clearly communicated [by the firm's technology committee] that it went beyond what the firm wanted to spend on the capital side, by 30-40 percent," says a law firm technology director who asked not to be identified. "So we had to go back and ask ourselves what we could live without for another year. We might get better performance on [Microsoft] Exchange 2007, but we were going to stay on Exchange 2003. We weren't going to spend money on new BlackBerrys. We made conscious choices not to do certain things."

But the recession is also forcing firms to look at new technologies that are more nimble and cost-effective. Law firms have never been known for embracing cutting-edge gear or still-in-progress technologies. Indeed, if you want to find the world's last user of Windows 95, a law firm is a good place to start. But that's changing. Budget constraints and demands for efficiency are prodding firms to rethink how they do things.

"Probably the biggest trend I'm seeing is firms looking to control costs by leveraging IT spending," says Daniel Gasparro, chief information officer and executive director of firm operations at Howrey. "This is being accomplished by weeding out those things that are used by one or two people, or [dropping] a solution that provides the same functionality as something else." Howrey, he says, is also decreasing the number of vendors it uses. "Previously, we had several hundred. By moving to fewer, bigger vendors, I can get 20-30 percent savings." Indeed, Howrey has put so much emphasis on its paring-and-pairing strategy that in February 2008, it set up a global procurement group to manage, and optimize, vendor relationships, contract costs and payment schedules -- not just for IT but in areas including travel and research services. Savings in the first year amounted to $1.8 million, of which IT accounted for $1.1 million. "Most businesses outside law firms [have an office like] this," says Gasparro. "We [too] need to find more efficient ways to deliver IT."


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Source: law.com
By: Alan Cohen