TechReport 2020: Budgeting & Planning
The budgeting and planning report is sponsored by LawPay.
Every year, the American Bar Association’s Legal Technology Resource Center and ABA members conduct the ABA Legal Technology Survey Report to see how lawyers are using technology in practice across the country. It is published in five volumes: “Online Research”, “Technology Basics & Security”, “Law Office Technology”, “Marketing & Communication Technology” and “Litigation Technology & E-Discovery”. The published results represent one of the most comprehensive lawyer technology surveys available. The survey is particularly adept at gathering responses from the sole proprietorship and small business group, the largest segment of the legal market. In the volume “Technology Basics & Security”, which deals with technology planning and budgeting, 26% of the respondents are in individual practice and 30% in companies with 2-9 lawyers. In this overview of law firm budgeting and planning results, we see where and where individual and small businesses differ from average.
Budgeting is essential
Respondents in the 2020 survey were asked if their companies’ budget is for technology. As of 2019, there hasn’t been a statistically significant change in the numbers, but overall the numbers look good. 62% responded positively (up from 60% in 2019). A look at the small business responses shows that this is an area where there is still room for improvement. In 2020, 59% of solos responded that they had no budget on technology and 41% of companies with 2-9 lawyers had no budget on technology (and 12% didn’t know). Cloud products – including “as a service” products – from security to infrastructure to managed IT resources and even installed software charge a price per user per month. The results of the “Law Office Technology” volume of the 2020 survey suggest that 13% of solos and 12% of companies with 2 to 9 lawyers will replace conventional software with cloud-based products in the next year. Budgeting for technology should be easier than ever. A technology budget will help ensure the commitment to update and maintain hardware and software. Not only is this critical to the uninterrupted availability of technology, it is also an integral part of security best practices. You want to be able to measure the return on investment (ROI) and first you need to see what you are considering, what you are actually spending, and then readjust as needed. The COVID-19 pandemic makes the need for a budget especially important so that the company can track expenses and income, and take proactive action to correct the expenses as needed.
Get your ROI with training
While the 2020 survey does not examine what is specifically included in a technology budget, other indicators should help companies expand their technology budget to include an investment in technology training rather than just budgeting for technology purchases. Over 67% of respondents said they need to keep up to date on the benefits and risks of the technology according to their professional rules. In 2020, 72% of respondents said that their company did not have technology training available, and 46% (up from 50% in 2019) of companies with 2-9 respondents said they did not have technology training available, although 4% said they had no technology training available not to do this. I dont know. This is not due to a lack of options available, it needs to be found and, in some cases, paid for.
When asked, “Where do you first go to learn more about legal / work-related technology?” Soli replied that they seek help from Google or some other non-legal web source (36%), followed by their bar association (15%). Firms with 2-9 lawyers also looked for resources on Google (26%), followed by their colleagues (25%). When it comes to new technology, 65% of solos and 60% of lawyers in law firms with 2 to 9 lawyers state that receiving education and training on new technologies such as blockchain and artificial intelligence (like 2019 to 2019). .
The basic technology tools – operating systems, browsers, Office suite and PDF manipulation software – are constantly being updated, updated and expanded. Lawyers and their teams should budget and deliver training to get the most out of the technology they use every day. Training can reveal easier and more effective ways to use technology efficiently. Here are some resources:
General technical training
(Some) Legal Tips, Tricks, and Training:
Unsurprisingly, 97% of the individual practitioners generally approve of technology purchase decisions in individual practices. In companies with 2 to 9 lawyers, “all partners” are most likely to approve purchase decisions (42%), although 34% of respondents stated that the “managing partner” approved purchase decisions. These decision makers have prevailed for most company sizes, although companies with 100 to 499 lawyers also had technology boards (21%) and C-level executives (26%) in the approval process. Firms with more than 500 lawyers have commissioned an Executive Committee (25%) or C-Level Executives (25%) to make purchasing decisions.
The question may not be who makes the decision to approve a technology purchase, but how that decision is made. Small to large companies buy new technology, but often the process does not result in corporate adoption or use. Steps must be taken to ensure companies make smart decisions and adopt new technology in a way that allows for maximum potential use and adoption. One way is to ask the lawyers what they want. A new question this year was, “Have you contributed to the types of technologies you use?” In companies with 2 to 9 lawyers, 91% had an impact on what technology they used. In response to the question: “For which of the following hardware are you allowed to choose your own brand / model / type?” In companies with 2 to 9 lawyers, 81% choose the smartphone they use and 69% the laptop. By involving the attorney in deciding which device to use, the attorney may be more inclined to get involved in the process and make better use of the technology or device.
Under the influence
There are hardly any differences between company sizes, which influences technology purchasing decisions. The top five resources that will have a huge impact on law firm technology buying decisions are: Employee Feedback, Peers, Consultants, Expert Reviews, and Free Trials. At the bottom of the list were print and online ads.
Respondents were asked to indicate a financial area in which the company spends software on the administration of the practice (e.g. practice management, document management, time and billing, etc.). Solo practitioners were most likely to spend less than $ 500 per year (32%), $ 1,000 to 2,999 (27%), or $ 500 to 999 (22%) – roughly the same as in 2019. However, in 2020, companies were $ 2 -9 Lawyers have increased their spending. Firms with 2-9 lawyers were most likely to spend $ 1,000-2,999 (23%), while those firms spent $ 500-1,000 (29%) in 2019, even though 23% voted “Don’t know.” The larger the company, the more likely the respondent marked the answer “don’t know”.
Respondents were asked to identify a range of annual hardware expenses (computers, tablets, printers, etc.). Solo practitioners were most likely to spend $ 500-999 on hardware (27%). 22% of respondents to companies with 2 to 9 lawyers said they spend $ 1,000 to $ 2,999 on hardware.
Since hardware costs tend to be cyclical, spending more on hardware than on software is a bit confusing. Much of the practice management technology is billed per user per month, so even a solo investing $ 50 per month and billing SaaS would spend $ 600. It will be interesting to see what lawyers buy in the Law Office Technology volume of the 2020 survey.
Make your priorities clear
When asked, “What is your company’s top priority for technology spending over the next 12 months?” Individual respondents and companies with 2-9 lawyers prioritized the same: hardware (35% and 31%); Mobile technology (22% and 17%); Marketing (15% and 17%) and Security (10% and 14%).
Security was a lower priority than marketing technology. Individual practitioners and smaller businesses represent customers with sensitive information and should prioritize security – possibly less the expense than investing in awareness, updating and updating hardware and software, and deploying best practices such as password managers and two-factor authentication.
According to the budgeting and planning results from the volume “Technology Basics & Security” of the 2020 survey, companies that budget for technology have either stable or slightly increasing spending. Solos are more likely to keep the same budget as last year (47%), while firms with 2-9 lawyers are more likely to increase their budget (48%). Companies should view budgeting for technology training as an investment in the company, its people, and customer service. Budgeting for technology helps them know where to spend their money wisely when they can also measure usage and keep track of what works – and what doesn’t – over time. Plan well, spend wisely, and prioritize accordingly. Technology is and will remain an essential part of running a law firm.