Part 1 – The PMS marketplace.
Focusing on the recent market consolidation and how that is impacting technology choice and the selection process
There are three certainties in life: death, taxes and law firms needing a new practice management system at some point. This Practice Primer has been put together to help law firms approach and implement a PMS project with confidence.
Everything we have learnt from the past three decades plus a dozen recent engagements and our on-going ‘MarketWatch’ we will distil down for you as we run through:
- The definition of a PMS project
- A high-level overview of vendors and their direction of travel from a strategic and technological perspective
- The traditional PMS project approach
- An alternative PMS project approach
- Extracting best value from consultants and suppliers
- Building an effective project team
- Preparing the team for change
What is a Practice Management System (PMS) project?
There are different definitions of what a PMS is – an accounts system, a time and billing platform, a single system that does everything or a collection of integrated systems which do everything.
Some people even suggest that a PMS is equivalent to an Enterprise Resource Planning (ERP) solution for lawyers.
This may sound like a simplistic view, but traditional law firm application architecture is either based on a best-of-breed or single provider approach. Either way, the core application remains the traditional accounting system solution with additional functions bolted on.
With the emergence of a strong ‘LegalTech’ start-up community we are seeing this becoming even more prevalent. Venture capital (VC) backed technology companies are driving a wave of tactical point solutions for certain matter types, enhanced collaborative working and risk management
The definition of PMS used within a firm is typically an indication of the software architecture they are currently using and to some extent this terminology will inform the expected scope of the project.
A PMS project is not so much about the software element but rather more about identifying and implementing a strategy which determines how the firm presents and uses its IT services.
A PMS project which is only defined as a replacement accounting system will be a disappointment to all involved: such an approach will not lead to any element of organisational change.
A PMS project should be seen as a once a decade opportunity to revaluate how the firm operates and to deliver a platform that supports the firm’s operational model. The investment should realise clearly defined benefits in terms of streamlining business process and enhancing legal service delivery.
Whatever the definition or whatever end system is used the replacement of a PMS is a major project: it is the equivalent of replacing the organisation’s IT heart.
The market has changed significantly in the last two years with a stream of acquisitions and some vendors exiting the marketplace all together.
The flurry of activity started in early 2019 when Lexis Nexis exited the PMS market completely when they sold their MS Dynamics-based LexisOne product to SAGlobal.
More recently though, it is the acquisition market that has been busy with a steady stream of takeovers making the legal technology headlines.
In February 2020 Practice Evolve acquired Linetime. Whilst Practice Evolve has its own PMS by the same name, this was largely used in Ireland and Australia and the company had struggled to gain a foothold in the UK market. One of Practice Evolve’s main drivers for acquiring Linetime was to extend its presence amongst top tier law firms. It has said it will continue to invest in both systems and has no plans to merge them in the short-term. However, it has also said there will be a convergence of technology and in the future the products may become more aligned – but done in a way which causes minimum disruption to clients. Practice Evolve itself is owned by the gigantic Australian Technology Investors who also own Leap and Infotrack.
In June 2020, The Access Group announced its intention to acquire Eclipse Legal Systems from Capita. Eclipse is the company behind the Proclaim Case and Practice Management system; there’s a large customer base, particularly in the niche high-volume Personal Injury, Debt Recovery and Conveyancing space.
The Access Group is known in the Top 200 as a leading provider of HR systems. The strategy seems to be to extend its HR services to customers of the Proclaim product and conversely offer additional services to the Top 200, thus extending its presence in the legal sector.
The following month, in July 2020, The Access Group also announced its acquisition of another Practice Management System, DPS (aka DPS Spitfire).
This takeover is more confusing, especially given how closely it came after the purchase of Eclipse. DPS/Spitfire is typically used by smaller firms and would be a direct competitor with Eclipse. It is yet to be seen how Access Group will manage the situation.
This acquisition quickly established The Access Group as a significant presence in the mid-tier but it does not seem to have the products which would be of interest to its traditional ‘Top 200′ client base given than both Eclipse and DPS tend to be used by firms with between 20 to 150 users.
Then in another dizzying move, Advanced Legal acquired Tikit. Advanced says it will invest in both the Tikit Partner for Windows (P4W) and Advanced Legal Business (ALB) products. Advanced Legal also provides two of the most widely used forms solutions (Oyez and Laserforms) as well as a plethora of historical PMS solutions.
Advanced says that this will increase its presence within the Top 100 law firms. As with Practice Evolve and Linetime, Advanced has also talked of a ‘convergence’ of development and shared components between the solutions. The current plan is that ALB will be used for smaller clients and P4W for larger ones; while for firms in the middle Advanced will put both products on a head-to-head basis.
Advanced hasn’t got a great history of PMS product management. About a decade ago it bought most of the small-market competition and summarily ‘end of lifed’ their products. This policy has since been reversed with Advanced now supporting products as long as clients want to use them. However, the nervousness of the client base is understandable.
Given this significant amount of consolidation there are scenarios where firms have left a vendor to seek improved service with another, now find themselves back in the fold of the vendor they were previously dissatisfied with. How this all plays out will be watched closely over the next couple of years.
However, one of the positives is that it does create a more competitive market with a number of vendors seeking to move into the upper or mid tiers with their offering.
For the smaller law firms, the cloud-based LEAP, Clio and Klyant solutions provide an attractive option for those looking for a product that does the basics and works out of the box.
However, for the mid-tier law firms the market is much busier, and the choice of system will depend on the functional requirements identified by your firm. The main systems in this mid space are detailed on the right..
The difficulty for firms looking to purchase systems in this tier is knowing what the long-term strategy is for vendors who now have more than one PMS in the marketplace.
|Access Group||Eclipse Proclaim|
|Partner for Windows (P4W)|
|Practice Evolve||Linetime Liberate|
This is a new and significant risk. It is well known that due to the unique niche nature of the products the resources of PMS vendors are limited. In particular those owned by venture capitalists who are looking for growth and/or efficiencies are often really pared back in terms of support and service resources. Indeed, one of the historical complaints of Advanced Legal clients is the lack of client service and account management.
By taking over competitors it may well increase the value of the business but there are not obvious efficiencies to be gained. Each product will need unique development and support services.
There can only be one answer to this challenge – convergence of products. The question where a vendor has multiple products then becomes which horse will they back?
Will they seek to converge or support these systems over the long term? If firms choose the wrong system, are they going to be expected to go through another change management process to replace an unsupported system in years to come? When entering into a contract with any of these vendors you must manage the risks of early product ‘end-of-lifeing.’
Our advice in this market would be for firms to press vendors on their long-term strategy and secure guarantees around longevity. The increased competition in the mid-tier could make this very much a buyers’ market.
Turning our attention to the top tier, the systems that traditionally serviced the larger firms are Elite 3E from Thomson Reuters and Aderant Expert.
Aderant and Elite are both currently looking to extend their reach downwards into the mid-market: given their domination of the larger firms there is nowhere else to go for them in the top 200. They each will occasionally win a client from a competitor but it’s a largely stagnant market.
Both of these systems have traditionally been ‘best of breed’ finance systems. However, both vendors have been building out other functionality which is putting them on course to compete on a more head-to-head basis with the smaller mid-market ‘single solution’ vendors.
Equally they have both recently announced a subscription-based web version of their products. These are cut-down versions of the solutions which are very firmly aimed at firms with circa 100 fee earners.
You will note we have not yet mentioned Peppermint which was the market’s ‘darling’ a few years go. Peppermint promised a new world – a PMS based on a CRM solution which would bring client management and interaction to the fore. It was a wonderful strategy but like many new IT solutions it does not deliver to the sales promises.
Early adopters reported issues with email management, high customisation costs, poor finance functionality and much higher than expected ownership costs. Sadly, most early adopters were firms used to old but very functional solutions such as Videss and did not have the resources to make Peppermint a viable solution.
Peppermint is one of the costliest solutions in the market and in our view is not a viable product for the mid-market and should only be considered if the firm is prepared to invest significantly and long-term in customisation services.