You have probably heard the joke. You want to know the current time. A consultant will ask to borrow your watch to tell you the time, and then walk off with your watch! The clear implication is that a consultant will tell you what you already know – and charge you for the pleasure. But we would obviously suggest that consultants can and should add value!
The Value of External Consultancy
Many firms have strong IT teams and as a result may feel that the internal IT team should undertake its own work in its entirety. However, it is often the case that internal teams have been in place for many years, often with many of the same staff and sometimes lacking the experience in undertaking the particular project required. It is also true that many law firms do not provide sufficient training budgets to ensure staff are kept abreast of the latest developments in their field of work. The pressures of the day-to-day job and blinkered thinking can prevent internal staff from identifying new solutions and opportunities. Furthermore, since the credit crunch most firms have scaled back their overhead resources.
It is quite a different scenario when using an external IT consultant. Consultants work in a range of organisations which are often in the same sector and which have similar problems to yours. If they are doing their job correctly, they also know the relevant suppliers within the sector and meet with them regularly to keep abreast of their products and solutions. It is highly likely that a consultant has undertaken a project similar to yours and can bring real-world experience to the fore. This ‘domain knowledge’ can be invaluable in supplementing and enhancing the knowledge and experience of your internal team. External consultants also bring a ‘fresh pair of eyes’ and see the situation differently to those who have been immersed in it for some time. They also have the time to make detailed assessments without getting distracted by day-to-day tasks.
Other firms have less than strong IT teams and often have a ‘doing’ IT manager rather than one showing IT leadership. Leadership also comes in many forms – from engaging with the business stakeholders to understand and communicate how technology can add value through to more innovative thought leadership. Firms like this can benefit even more from an independent IT review or other assistance. Apart from the assistance mentioned above, the IT consultant can help define strategy and priorities, ensure the internal teams have the correct structure and skill sets, recommend any changes to the current IT team or simply bring about improvements through mentoring and training.
Of course, there are also firms that fully outsource their IT. Whilst it would be hoped that the supplier is doing its job and that no day-to-day issues would exist it is firms like these which benefit the most from external support. Often, the Managed Service Providers (MSPs) are IT vendors with little experience of law firm technology or the pressures of working in a law firm and are overly focused on ‘product’ rather than service or end-user needs.
Every customer-supplier relationship has the potential to have problems or to benefit from improvements and outsourcing relationships need close management and nurturing. Once again, IT consultants will have knowledge of several IT service providers and how they work within various firms. They will therefore be able to give an independent view of whether your supplier is operating efficiently or whether there might be opportunities for improvement. In the case of customer-supplier disputes, an IT consultant will be viewed as more independent meaning their findings and opinions will carry more weight. Most importantly, in our experience, the firms who have fully outsourced their IT are the ones without a comprehensive IT strategy which aligns to the business strategy.
The Styles of Consultancy
There are probably as many consultancy styles as there are management styles and many books have been written about management and leadership styles. But we can consider a few style differences we have noticed across various legal sector IT consultancies.
We are aware that some consultancies always seem to treat each client as if they have never seen a similar one before. This means diving into endless questions, taking lots of your staff time and producing endless, complicated documents for your review. Law firms, of course, use precedents and other template documents to simplify their work, to avoid mistakes and to improve the efficiency of their processes. In a similar way, a consultancy can develop tried and tested processes for many areas of their work. Take, for example, a practice management system (PMS) selection process. A consultancy can develop a spreadsheet containing hundreds of requirements that most law firms may or may not require. With some simple interviews the consultancy is able to determine which requirements apply along with their relative importance.
This isn’t to say that we see all firms as being the same and this is where the effort should be concentrated. It is important that the consultancy spends the necessary time with the key players in your firm to understand your unique business, your particular goals and issues and what outcome you hope to achieve. This allows those requirements that are unique to your firm to be teased out and these can then be added to the more standard list of requirements noted above. This allows a PMS selection (and similar processes) to be undertaken in a very efficient and competitive manner compared to other consultancies.
Another important element of style is not to act as blockers between you the client and any potential suppliers. Some consultancies discourage discussion between the law firm and the suppliers involved in the tender process, preferring to control all communication themselves. A good consultancy will encourage communication and relationship building as part of the procurement process. This is essential as it is often the softer, more qualitative elements, such as ‘can we work with these people’, that will lead to the right decision about a supplier. The best consultants are facilitators rather than blockers.
We also believe in the old adage of not throwing out the baby with the bath water. If a consultancy feels your current systems can be improved through upgrade or development or that they can be better used with improved training, then it is right to recommend such solutions. You should not be put through a long system selection process simply to bring you back where you started.
The last important element to mention about style is independence. In our case, we work closely with any suppliers who are willing to do so, and we never take payments or inducements for introducing or choosing a particular supplier. If a supplier would normally offer such commission, then we simply recommend that they pass this on as a saving to our client by deducting this amount from the pricing in their proposal to our client.
The Costs and Value of Consultancy
We have seen above that there are many ways in which an IT consultant can provide IT assistance and add value through their knowledge and independence. But isn’t this just extra expense that you can do without? In reality, a good IT consultant can be obtained for a cost that is similar to that of a law firm associate and the changes that they bring can be lasting and highly beneficial.
A solid IT strategy will benefit the firm and every member within it for years to come. Some applications, like a legal practice management system (PMS), need to be chosen carefully and implemented properly as they are likely to be with your firm for ten years or more. Clearly, spending a modest number of days getting these building blocks properly in place will reap great rewards in the long-term.
The Types of Consultancy
In our experience there are four types of consultancy that law firms are looking for:
Reviews and Strategy Creation
This is what you could refer to as standard consultancy. Often a firm has a feeling or knows that something is not working as well as it could do but is not sure exactly what is causing the problems or what to do about them.
In this scenario external advisors are brought in to assist the firm to define the root cause and make recommendations as to the resolution.
Another major reason for external assistance in this area is the desire to ‘keep up with the Joneses’. In this scenario, firms feel they are being left behind by competitors and want external support in learning about market trends and emerging technology that their competitors are using.
The final, and more constructive, reason is a firm has recognised it can receive enormous value by bringing in experts with wider experience than their internally focused team to assist with the creation of their strategy.
System and Vendor Selection
Selection engagements normally follow on immediately after a review or strategy creation engagement. This stage could be seen as picking the answers to the problems posed in the review stage. Selection could cover any procurement exercise be that a system selection, outsourcing of a function or service or even the employment of new staff members.
In these engagements the firm uses the experience of consultants for the definition of requirements, knowledge of the market to determine a long list of suppliers and expertise in running request to tender or interview processes.
Again, the injection of regular experience and refined processes can help firms cut through the challenge of picking the right solution.
Implementation and Strategy Execution
In this scenario, firms are looking for external support in implementing the answers arrived at in the selection stage.
Many consultancy firms stop after the procurement stage but at Baskerville Drummond we see implementation and execution as the most important element of the work we undertake. In fact, the reason we do so much selection work is to show our clients the value of external help early in the process so that we can be engaged for the implementation work.
Often, when undertaking large projects, there is nobody internally who has undertaken such work, or they have only done it once. This essentially means the internal team needs to learn on the job.
An external advisor, who has undertaken multiple implementations, can enhance internal teams by adding valuable experience, tactics and lessons learned. This reduces risk and the amount of rework and generally de-stresses the situation.
This final element we refer to as ‘Virtual Directors’. These engagements are normally long-term (we have clients who have used our Virtual Director services for over five years).
In essence, your trusted advisor can provide the skills and experience of a senior IT director and supply all the benefits stated above for a fraction of the price of a full-time resource. Furthermore, the flexibility of the Trusted Advisor/VITD gives you all the benefits of transformational change and more on an ‘as you need it’ basis. (NB. Baskerville Drummond also operates exactly the same model in finance and business strategy, through our Virtual Finance Director service)
This model works particularly well where a firm has outsourced its IT service; or where there are relatively junior people who are good at the day-to-day but are not experienced at management or business planning.
It may also be the case that the current IT team is too small or is occupied with reactive support needs, such as a merger or office move, which hinder strategic thinking. There is the issue too of your outsourced MSP not always able to provide advice around business applications. Alternatively, it may be a scenario where an otherwise good team has fallen behind the growth of the firm. In this case consultants can support the team and act as mentors.
The first three types listed above could be classified as ‘transformational’ where the consultant is engaged on a project-by-project basis to identify and engender change. Where firms have a programme of projects intended to deliver longer-term change, or lack internal leadership, then a trusted advisor role would be expected to operate, from time to time, in all of the engagement modes described above.
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