When I was asked to pen a few words on the future of Practice Management Systems in 2022 and beyond I thought it would be an easy piece to write. It was only when I opened Word that it dawned on me the risk of ridicule that making bold sweeping statements can have when they don’t come true.
I will therefore caveat everything that follows by saying if they don’t happen it’s because, like a butterfly flapping its wings, my thoughts altered the future. (That’s my excuse and I’m sticking to it !)
So, stepping forward with the confidence of Steve Balmer, CEO of Microsoft, who in 2007 predicted “There is no chance of the iPhone ever gaining significant market share” let’s turn our crystal ball towards the PMS.
2022 – The Year of the ‘Let’s wait and see’
The last few years has seen unprecedented change of ownership of leading mid-market PMS systems (c. £8m to £30 Million) with nine of the leading PMS solutions now in the hands of just three large IT companies. We have also seen Peppermint, once seen as the great disrupter, largely retreat from the fully featured PMS to a CRM/CMS strategy. This has led to market confusion, frustrated clients, lack of viable options and trepidation as to what the future brings.
In 2022 I predict that PMS will continue to be a hot topic as I do not ever recall a time where there are so many conversations with firms about their options. However, conversely, I expect it to be a year of discussion and definition rather than one of action.
Despite market demand and law firm frustrations, the number of firms changing traditional mid-market, single solution PMS set-ups will slow down due to market uncertainty. Unless a firm is operating on an ‘end-of-life’ platform and has to change, this could be the year of ‘wait and see’ as firms watch suppliers’ strategy fall into place.
Firms should use this period to influence vendors’ clarity of direction and development roadmap as well as assessing what it really would be like to work with the proposing vendors.
I believe that 2022 will be the year the PMS ‘consolidators’ start planning on how to get returns on their investments.
It is simply not viable for suppliers to own more than one PMS solution and do a good job of it. Equally, there is no point purchasing a competitive solution if you are just going to continue to run it as a standalone competitive entity.
I would expect to see merging of development teams, combining of features and a general convergence between the PMS solutions now owned by the same company so they have one ‘go-forward’ solution.
I also do not believe the market disruptions are complete and I would expect other suppliers to change ownership during 2022. There could even be breakaways from previous take-overs where the expected returns have not materialised.
Software-as-a-Service became a reality in 2021 for many firms; typically the preserve of web-based solutions we have now seen this become the norm for one of the larger suppliers.
It represents a significant price increase for firms used to the traditional ‘purchase and maintain’ style of software licencing and has sent shockwaves through the userbase.
It is here to stay, and I would fully expect all other vendors to move towards a similar model.
The ‘big three’ will continue to clarify their short, mid and long-term strategy and seek to deliver this by losing as few clients as possible. But make no mistake, these companies know that the fragility of the market and the limited options available puts them in a position of strength. We have already seen some sweeping decisions ‘dictated’ to the userbase and this will continue.
As I mentioned earlier there are more conversations about PMS than ever before. I am seeing, and indeed facilitating, conversations between law firms about the situation. To counteract the supplier power I’d like to think there’ll be a resurgence of user groups as firms work together to find answers to the challenges they face.
Make Do and Mend
Given the challenges, more law firms on a supported system will opt for the expedient of a ‘make do and mend’ strategy in the short term:-
- Investing in customisations
- Training staff
- Investing in tactical solutions (e.g., strategic case management systems) rather than expecting the PMS to do all functions
- Spending longer talking to potential vendors
The New Entries
It would be inaccurate to say that TRE & Aderant do not have clients in this space but normally you would associate both providers with ‘top 200’ firms or at least 50 – 75 fee earners rather than competing head-to-head with the likes of P4W, SOS, Linetime, DPS or Eclipse.
However, given the state of the mid-market traditional suppliers we are already seeing them operating more seriously in the sub 200 staff market and I would expect this to continue as both vendors work to expand their ‘best of breed’ finance systems into fully featured PMSs, providing the type of functionality you would expect to see from the traditional ‘single supplier’ solutions.
Equally ‘smaller firm’ or new entrant solutions such as Action Step, LEAP, Clio, Osprey could well start to push up market. However, as we have seen with the struggles of Peppermint, creating a new fully featured PMS is no mean feat – so given the functionality gap, and in some cases high monthly costs, this upward climb will not be as immediate or straightforward as the descent of Aderant and TRE, who will be able to come ‘down market’ by reducing functionality or providing packaged installations.
The Long View
The crystal ball is really misting up as we look as far as 2025 but I expect to see:
- One ‘go forward’ PMS solution from each vendor (Note: there may be two flavours – one onsite and one hosted)
- Aderant and TRE as serious contenders in the mid-market PMS space offering a fully featured solution which is affordable to sub 200 staff firms.
- One or two of the ‘smaller firm’ solutions to have made inroads into the mid-market
- Most law firms taking a more tactical application approach, breaking with the tradition of using the PMS for all aspects of their business.