Opportunities in LawTech in Africa
I read with interest Dennis Kennedy’s article ‘Eight Legal Technology Trends for 2008’ published on LLRX in February 2008. While I agree with most of his views, it strikes me that the South African legal technology market is very different to the legal-tech market in the USA. That’s not to say we’re backward when it comes to technology – in fact, quite the contrary.

We were promoting all-in-one legal accounting and practice management in South Africa ten years before America finally realized it was the way to go. And our conveyancing software led the world in terms of its sophistication. However, one area where we do lag is in lawyers’ appreciation for what legal technology can do for them. Sure, most lawyers use email today. And some are even well versed on Microsoft Office. But few understand just how much more productive they could be if they truly got to grips with technology. So, what are the South African legal technology trends likely to be for 2009?

  1. It will be a slow year for technology vendors

    The political turmoil in South Africa, the high inflation rate and interest rate uncertainty, the recent electricity tariff hike, the high and erratic fuel price, the banking crisis, and the National Credit Act have all taken their toll on the South African economy. While we aren’t likely to fare as badly as the USA, it will still be a couple of years before the sun begins to shine on us again.

    That means firms will limit their technology purchases to products and services that will either make or save them money. That’s not good news for tech vendors, many of which will be forced to close up shop before the economy finally turns. There may still be some cash-rich law firms who see the lull as a good time to upgrade their systems, but they will be few and far between. Firms should also be especially cautious about being sold technology that seems great during the sales pitch, but that they will never be able to implement on the ground. Implementing new technology is a lot more difficult than signing the order

    So what can tech vendors do to ease the pain? Like their clients, they need to run as lean as possible. And if they want to boost their sales, they need to work out how their products will save or make money for their clients. They’ll also need to beef up their marketing to remain competitive, since their competitors will almost certainly up their game. The good news for law firms is that vendors will be more innovative, prices will be keener, and service levels should improve during the slump.

  2. Firms will use their existing products better

    It has often been said that we use only a fraction of the functionality offered by software products. And the same applies to hardware. Printers, cell phones, telephone systems, the Internet. There is so much more that can be done with existing technology in law firms.

    For example, email can be echoed to cell phones, improving customer service, and allowing lawyers to be more mobile. The Internet can be used to keep abreast of the latest developments at the firm’s large clients. Email can be used to stay in touch with clients, and to strengthen the relationship. Contract documents can be re-used in the firm by making use of simple (existing) search technology. Faxes can be received electronically, rather than wasting ink and paper on a conventional fax machine.

    All that is required is to identify what software the firm already owns, then to analyse what more can be done with it. Firms should beware of simply clutching at any existing technology though, and should rather take time to prioritise which initiatives will bring the quickest and highest return.

    Certainly, ensuring that legal secretaries are fully conversant with Microsoft Word has to be a good starting point. Any money spent on training, especially now that many firms have cut back on staff, will be well spent. Partners too can become more conversant with technology, and by knowing how to use Microsoft Outlook and the Internet better, they could become a lot more productive. All of this requires careful planning though, and for larger firms, they will need to appoint someone to own this initiative, or it will simply fall through the cracks.

  3. Faxing goes electronic

    Years ago when the fax machine was first introduced, it was hailed as one of the single best advances in technology ever. (The other contenders would probably be the invention of the personal computer, word processing, email, and the Internet.) In the early days, fax machines made use of expensive thermal paper, and it is quite surprising to see how many of these old fax machines are still out there. Since the cost of consumables is often lost in the budget, firms aren’t aware how much money they are wasting.

    But it’s not just the old thermal faxes that are expensive to run. More recently, fax machines made use of inkjet technology, which is not much cheaper than thermal paper. That’s why manufacturers price their printers so competitively – because their profit on inks and toners is so high. The latest generation of fax machines makes use of laserjet technology, which uses standard toner cartridges. But although not as expensive as the ink, toner is still expensive.

    With the advent of electronic faxing technology, there is no reason why faxes shouldn’t be received into email, doing away with the cost of printing altogether. Once the fax is received, the recipient may still choose to print it out for the file, but many faxes will simply be deleted. There are also other benefits to be had from electronic faxing: The fax is delivered right to the recipient’s desktop, which reduces the chances of it getting lost. It’s also quicker, since it is point-to-point delivery. While many large firms have already gone electronic for faxing, most small firms have not.

  4. Email goes mobile
    Many cellphones today can synchronise email with the office email system. However, in the past, IT managers often felt this presented a security risk, and so it was blocked. Today it is much more commonplace, and 2009 will see broader acceptance of this technology.

    Certainly, there are still problems with spam mail, which might clutter up the cell phone inbox. But spam filters on email systems can block these unwanted messages before they reach one’s phone. The value of receiving mail even while out of the office is that you can respond to crises faster, and you are better able to stay in touch with your clients and colleagues. Of course, if you don’t particularly like email, you probably won’t see this as a positive! But mobile email is going to take off in 2009, whether we like it or not.

  5. Printing goes pay-as-you-go (on larger printers)

    What this means is that law firms will be charged per copy for laser printing. While this is already happening, poor marketing has slowed the idea’s progress. Consider copiers for example – almost without exception firms are charged for every copy they make. The click charge covers toner, maintenance/repairs and a loan unit should your unit fail. The only thing it doesn’t include is paper. The same will soon apply to laser printers – at least, the larger units anyway.

    To the best of my knowledge, no printer vendors have been brave (or silly) enough to provide the hardware free of charge yet, mainly because they have no control over how many pages will be printed. But some vendors do provide a rental scheme, with a minimum monthly charge protecting their click revenue. In some cases, the cost per page seems quite reasonable when compared to the cost of toner and repairs. However, since each page consumes a different amount of toner, it is near-impossible to establish whether a click charge is better than buying your own toner and paying for your own repairs, especially when one considers some of the toner-saving techniques available today.

  6. Firms start to look at free software

    In the past firms were wary of using free software because it was regarded as inferior. But each year the free software movement gains momentum, and today there are a number of quality products which can be used in law firms. For example, Google offers a number of useful free utilities. Fax2Email allows you to receive faxes free. OpenOffice.org is an office suite which competes with Microsoft Office, and today it is looking more polished than ever.

    There are some complications, of course. Firstly, finding staff conversant with OpenOffice.org is difficult, and it is debatable whether it is cheaper to purchase Microsoft Office, or to pay for training on OpenOffice.org. And, certain conveyancing case-management products don’t run on OpenOffice.org. But for people who don’t use case management systems, OpenOffice.org is a viable alternative. Since it reads and writes files in a format which Microsoft Office can understand, it is also ideal for use at home.

    Free software is here to stay, although there is always the concern that at some point in the future, it will no longer be free. Until then though, it is certainly worth considering.

  7. CRM starts to gain acceptance

    There are so many stories of failed installations of ‘customer relationship management’ (CRM), although not too many from SA law firms. That’s probably because only a handful of law firms in South Africa have actually implemented CRM systems. It is true to say that many large firm installations of CRM fail, and this is largely because CRM software is difficult to implement. But CRM doesn’t have to be a nightmare. There are simple, low-cost systems on the market which will do the bulk of what firms need. Some of the legal accounting systems are also starting to incorporate CRM into their offering.

    But having the information is one thing. Deciding how to use it is another. One thing is for certain: As the economy worsens, so law firms will have to work harder to retain and attract clients (in that order). Without a CRM system of some description, that’s going to be a difficult task.

    Firms shouldn’t be bamboozled into spending a fortune on CRM though, since it is a high-risk installation. They should rather tone-down their expectations, and implement a lower cost solution that gives them the basics of what they need. Once they get to grips with the simple system, they can consider upgrading to a more sophisticated system.

  8. Video conferencing finally makes sense

    Video conferencing has to be one of the least successful technologies on the planet. That’s probably because it is so expensive. But things are changing that may make video conferencing more compelling. For example, gridlock in the major South African cities is changing the way we communicate with our clients. Large law firms are spinning off branches in other cities left, right and centre. Fuel prices are making air travel more expensive, and, if some of the stories regarding air safety are to be believed, fewer and fewer people are going to want to fly for business reasons.

    A mid-size firm in London has 12 conference rooms, all of which have video conferencing. When asked why, their IT manager said that video conferencing impresses clients, but added that it had become too expensive (in time) for partners to travel to other centres to attend business meetings. Of course, in South Africa we have a way to go before we reach that stage, partly because not enough firms have video conferencing, and partly because of the cost of bandwidth.

    But things could be changing. Google offers simple video conferencing for free. Sure, there is still the cost of bandwidth, and you’ll need a well-lit room and a PC, but for most purposes, Google’s video conferencing works fine. Of course, video conferencing isn’t for everyone. But for firms with branches around the country, it makes sense.

    One reason why video conferencing might not be successful in 2009 is that it is unnatural. With a phone, one picks it up and speaks. Video conferencing takes some setup before the conversation can get underway. So although video conferencing might make sense, it could be years before it finally becomes ubiquitous. And prices for the high-end commercial products will need to come down a lot before that happens.

There is no question that technology, if used properly, can reduce costs and increase fees for law firms. And that’s the problem: In most law firms technology isn’t used properly. In good times, firms don’t need to get the most out of their computers, but, as our economy tightens, it will be interesting to see how firms adapt.


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