20 Jan 2023

'I'll tell you what I want, what I really, really want' or how to make IT budgeting easier

Well-prepared firms are more likely to have well-managed budgeting processes, writes 3Kites' Paul Longhurst

The SPICE GIRLS at the 1997 Cannes Film Festival.

Shutterstock; Featureflash Photo Agency

'I'll tell you what I want, what I really, really want.'

So goes the opening line from the Spice Girls debut hit Wannabe.  As a law firm, it’s so much easier to know what you want when you have an IT strategy that underpins a broader business strategy.  

At this time of year, firms are starting to pull budgets together from practice groups and support departments. But how many of these are exercises in grabbing a slice of the pie without any real understanding of what the firm will need in the next two to three yearsor so?

The budgeting process should be a reflection of the projects lined up in a strategy as agreed with the broader business whilst these projects should either be enablers of other deliverables (improved client service, easier remote access, etc) along with non-negotiable operational maintenance (eg upgrading laptops, increasing network bandwidth and the like). 

However, we sometimes find that strategies are completely absent or, where available, are simply a list of tasks motivated in part by trying to keep the IT team busy and happy. This approach can lead to lumpy spend with unforeseen projects coming at the business without the planning that would help to finance these more smoothly.

At worst, it can lead to suboptimal decisions being taken and the wrong products being selected on the basis that they fit within a limited budget rather than delivering the right functional solution.

That isn’t to say that firms which have well documented and maintained strategies are never hit by unplanned projects –just look at what happened with the pandemic where projects sprang up without warning as firms scrabbled to support a workforce now largely homebound.

We would always start with the business objectives: what is the firm trying to achieve? 

However, that was an extreme situation and, whilst it makes sense to allow for contingencies, well-prepared firms are more likely to have well-managed budgeting processes.

So what can your firm do if it is struggling with budgeting ?

We would always start with the business objectives: what is the firm trying to achieve? What would it like to improve? This might include growth through merger or lateral hires, addition of a stronger knowledge management function to reduce the effort lawyers spend reinventing the wheel, or simply a general improvement of operational efficiency. 

Whatever the objectives, and alongside an understanding of when these need to be delivered, the IT team should craft its own strategy to incorporate these objectives alongside operational maintenance.


 

Register for the 3Kites webinar on 8 February: What should be in your technology plan and budget for the next financial year?

 


This is where the grown-up stuff starts because it might be that ballpark costs in the IT strategy start to look unpalatable. The decisions here, for the most part, are commercial and not technical: Do we need to implement a new practice management system this year? Should the laptop upgrade come before a new case management system? Should our merger plans consider the systems of target firms so that we don’t double up unnecessarily?

Whilst it is first and foremost a commercial consideration, IT leaders should certainly be a part of this debate and may even need to initiate theconversations. 

In terms of timescales, this is not the kind of planning that should be taking place in mid-February in order to get a budget out before the end of March. At the very least it should be happening now, and ideally strategies should be reviewed before the end of each calendar year to ensure they are in good shape for the two to three years ahead with a five year vision statement to set longer term ambitions.

In that way, you can tell them what they want, what they really, really want – zig-a-zig-ah!

Paul Longhurst is a director of 3Kites. This is the 14th article in the series Navigating Legaltech

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About 3Kites and Kemp IT Law
3Kites is an independent consultancy, which is to say that we have no ties or arrangements with any suppliers so that we can provide our clients with unfettered advice. We have been operating since 2006 and our consultants include former law firm partners (one a managing partner), a GC, two law firm IT Directors and an owner of a practice management company. This blend of skills and experience puts us in a unique position when providing advice on IT strategy, fractional IT management, knowledge management, product selections, process review (including the legal process) and more besides. 3Kites often works closely with Kemp IT Law (KITL), a boutique law firm offering its clients advice on IT services and related areas such as GDPR. Where relevant (eg when discussing cloud computing in a future article) this column may include content from the team at KITL to provide readers with a broader perspective including any regulatory considerations.
 

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