The introduction of Alternative Business Structures (ABS) is causing seismic shifts in the British legal industry. Only IT can save the day, says Rob Coupland of TelecityGroup.
Information technnology could save the day for law firms. Nopporn
Today, a year on from the first application of the legislation in 2012, many legal firms are undergoing a wide-scale evaluation of their internal systems and practises as they look to secure funding from this newly created ecosystem of potential stakeholders. Investment partners can now come in all shapes and sizes with high profile brands such as Tesco, the AA and BT all looking to expand into legal services. Surprisingly though - for such a traditional industry - this is a process where IT is taking centre stage.
With ABS opening up the possibility for non-LLPs to enter into partnerships with - and even take ownership of - law firms, practices up and down the country find themselves in the shop window for investors weighing up the long-term credentials of investment. Those looking to take on equity within a legal firm will always conduct a thorough examination of the IT setup as part of their due diligence. This will include IT security, as well as the firm’s supporting IT infrastructure, ensuring it has sufficient resilience and scalability to maintain business growth.
Judgment time for IT
With investors looking to maximise their return on investment, efficient, cost-effective and growth-enabling IT holds the key for organisations not only to unlock the world of investment but also to stay ahead of the competition. With most legal firms investing their time and effort into client service, significant benefits can be gained by working with specialist partners to fully host and this infrastructure. Utilising purpose-built data centre environments and external expertise, outsourcing represents an opportunity for firms to focus on their core business, and ensure they are in the right shape to attract interest from would-be investors.
The fast-changing industry also dictates the need for a truly flexible IT strategy. Businesses with the agility to introduce innovation and grow quickly represent a far more attractive proposition to investors in the long term. However, unlike many other industries, we are unlikely to see the wide-scale adoption of cloud computing - based on shared services and platforms – in the legal industry.
With all law firms under statutory obligation to ensure that they are compliant with data protection regulations, this reluctance around cloud is due in part to the need for a complete audit trail of data on-demand. Enforced by the Solicitor's Regulation Authority (SRA), the technology makeup of modern law firms should act as a means of staying on the right side of legislation and providing customers with the assurances over the security of highly confidential legal data being stored electronically every day.
What this means is that traditional partnership-style law firms and bigger organisations alike will need to start to take a different view on how they attract ‘readily available capital’ by focusing on providing potential external funders proof of a sensible return on investment. As the enabler of growth, security and efficiency, IT infrastructure is the first port of call for many of these firms. Despite the challenging times of today’s economy, with IT flexibility and structure, organisations can capitalise on an evolving marketplace.
The opportunities are now there for those firms that wish to take advantage of the opening up of the more flexible funding options available. Placing IT infrastructure in purpose-built colocation data centre facilities enables law firms to stay in control of these processes, while at the same time providing them with the flexibility and agility to support ongoing growth potential – all considerations that investors will seek assurances on. In the coming years, efficient, resilient and growth-enabling IT holds the key for many organisations looking to unlock the potential opened up by the introduction of into the British legal system.
Rob Coupland is Managing Director of TelecityGroup UK