Technology Efficiencies Require Billing Alternatives

Published in Valley Lawyer, June 2012

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IN A PREVIOUS COLUMN, IT WAS DISCUSSED HOW leveraging the efficiencies of technology can be a vital survival strategy for small firm practitioners in the "new normal" turmoil that law firms must deal with—but only if technology leverage is combined with innovative approaches to billing. This point is crucial, because technology efficiencies without billing innovation will keep the firm from realizing technology's financial benefit. In fact it could be the road to financial ruin if combined with a rigid billable hour approach.

Automation Principles

The Industrial Revolution demonstrated that that the more equipment used to make a product, less labor was required, and the lower the price. With a lower price, volume increased, and profits likewise could rise. Automation produced the same result but with a different name. The more product or service a machine could produce, the less expensive the product. The result would be a lower price with higher volume, with efficiency producing higher profits. These principles are the same for law firms. More machine power, whether through eDiscovery software, knowledge management systems or other innovations, reduces labor, which tends to reduce cost, which tends to reduce price, which increases volume and profits.

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