Canadian Lawyer

46 F e b r u A r y 2 0 1 5 w w w . C A N A D I A N L a w y e r m a g . c o m The bears, on the other hand, he says, "are more internally focused" and looking to hunker down like a hibernating bear. They are more cautious and focused on "growing their wallet share of existing relationships." So they are looking to sell more services to existing clients and improving their overall performance. Not surprisingly, large law firms, with their established client base, show a bias toward bear status, while smaller firms lean toward tigers. So why should you care? Because it impacts the type of strategic technol- ogy investments a law firm should make, Cartrett says. The International Legal Technology Association estimates between two and four per cent of a law firm's revenues are spent on technology, which is low com- pared to other industries. It still adds up to millions of dollars. Typically, annual spend- ing is between US$8,000 and US$17,000 a lawyer, depending on the size and type of firm. Technology budgets are also rising, with 49 per cent of ILTA surveyed firms reporting that their IT budgets increased in 2014. Experts expect that trend to continue, particularly at large law firms, which must cope with both the big data explosion and a growing focus on analytics. As the technology pressure increases, it's imperative legal decision-makers ensure they are spending wisely, which brings us back to the tiger-bear distinction. The type of support tigers need differs from bears. So if you're a tiger firm buying bear technol- ogy, you're wasting firm dollars. You need to align that investment with your firm's growth strategy, says Cartrett. For example, tigers are hunters and need competitive information and data geared toward markets and customers. So tech spending should be leveraged toward things like business development technolo- gies and processes for responding to RFPs and pitching clients. For bears, analytics are the focus and figuring out profitability of their services and departments. "The bears are really trying to dissect and understand how they can provide better value back into their existing client base," says Cartrett. When it comes to technology spending priorities, the survey found 98 per cent of firms were investing in some type of tech- nology project and 37 per cent had hiked their technology budget. About 74 per cent of large firms say they face increasing pres- sure to lower hourly billing rates and devel- op alternative fee arrangements, up from past years. Yet, only 27 per cent of small and medium firms reported such pressure. The survey also distinguishes priorities between large and small/medium firms and highlights the different traits exhibited by tiger versus bear firms. Large firms The top four tech investment priorities at large firms include: • optimizing existing systems (73%); • automating workflows, processes (71%); • tools for improving productivity (68%); and, • analyzing firm performance in detail (65%). The distinction between bear and tigers at large firms includes: • More bears are investing in analytics than tigers (70% v. 56%). • Tigers are more focused than bears on technology to cut operational and administrative costs (56% v. 37%). • Tigers are more likely than bears to spend on technology that captures bill- able hours (51% to 38%). Small firms The top four tech investment priorities at small/medium firms differed notably from large firms. They include: • optimizing existing systems (51%); • marketing and business development (47%); • tools for improving productivity (39%); and, • systems to automate workflows and pro- cesses (35%). The distinction between small/medium tiger and bear firms includes: • Bears are more likely to increase their IT budgets than tigers (53% v. 29%). • Bears are more likely to invest in tools to improve the productivity of lawyers and timekeepers than tigers (61% v. 29%). • More bears are investing in tools to ana- lyze firm, practice group, timekeeper, or other performance data in detail than tigers (42% v. 12%). Aderant plans to drill down further on the tiger versus bear distinction in future surveys. In the meantime, the challenge for law firms is taming the tigers and bears. It's one thing to identify them, but what happens when one practice group has bear-like tendencies, while another exhibits tiger-like qualities. Jim Middlemiss is a principal at Web- NewsManagement.com. b A C k pA g e o p I N I o N @JimMiddlemiss By Jim Middlemiss s your law firm a tiger or a bear? It's a question Aderant Holdings Inc., a legal software company, is raising based on its latest legal technology industry survey released in late 2014. The mammal- like nature of a law firm provides insight into how the firm approaches issues such as client development, staffing, and technology investment. Aderant interviewed 213 large and small law firms (under 50 lawyers) in 13 coun- tries, including a dozen in Canada. It found law firms fall into two camps regardless of size — tigers and bears, says Chris Cartrett, Aderant's senior vice president of sales. "The tigers are more the hunters. They're the firms looking outside of their cave and going out into the field. They are aggressive about growing their firm from the outside." They are externally focused, and their growth strategies are geared to finding new clients. When tigers and bears square off I

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