Technology Investments and Two-Handed Decision Making

07/01/2011
How to determine ROI when considering hardware and software upgrades.

ALA's journal, Legal Management, July/August 2011

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New computers, software and database research services are significant overhead costs for any law firm. The cycle of change for such technology is inexorable, and is in fact speeding up. Operating systems replace one another after little more than 18 to 24 months (think Vista to Windows 7 to Windows 8). Desktop computers are considered passé and laptops quaint when replaced by netbooks, portable viewers and smartphones.

Large firms typically make technology upgrades on a three-year cycle, with smaller firms going up to five or six years. The Great Recession has made firms stretch these replacement cycles out even further because of the high up-front expense, but that merely postpones the inevitable. One recent survey indicated that almost two-thirds of law firms were going to make significant expenditures on technology in the coming year. There are a number of fundamental reasons for the inevitability of this pent-up demand:

  • Firms want new technology because it’s cool and attractive (adjectives often applied to Apple products like the iPad or iPhone), or it helps them do more, faster.

  • Firms worry that their existing technology will break down the older it gets, threatening a loss of client service capability while they scramble for a replacement.

  • Firms have a strong competitive streak, and they either want to be the first to tout using a new technology, or don’t want to admit others are using it and they are not.

  • Firms have an ethical responsibility to stay abreast of current technology standards in their practice fields and geographic territory — failure to do so can be considered a breach of the duty of care, and thus a violation of the Rules of Professional Conduct.

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