Laying Down the Law on Integration

Laying Down the Law on Integration

In July 1999 law firm Phillips Fox decided to move from a federation of individual offices to a single, corporately managed legal firm. Now the organisation is learning that when it comes to integrating common strategies, systems and practices, the changes are not only technological, but also culturalWhen law firm Phillips Fox was established in Melbourne in 1864, its biggest technology challenge was probably making sure everyone had a good supply of ink and a pen nib in prime working order.

It is 137 years later and Phillips Fox is Australia's sixth largest law firm. The financial service insurance litigation specialist firm prides itself on always using its technology as a differentiation tool and a provider of competitive edge across all 11 of its offices in Australia, New Zealand and Vietnam.

Phillips Fox has an industry-beating, knowledge-management infrastructure and an extensive corporate intranet that is used by both the corporation's own lawyers and by some of its largest clients. It also maintains many applications in an open systems environment, making them readily accessible to both staff and clients via browser technology and a well-established document-management system.

Now, however, the firm is facing an IT strategy challenge. It is progressively rolling out the infrastructure needed to support its July 1999 move from being a federation of individual offices to a corporately managed, fully integrated legal firm with common strategies, systems, approaches and practices. It's not only a technological but also a severe cultural challenge for any law firm, where individual members are prone, more than most, to a highly independent spirit.

"We've got a situation where we've got five different offices that have had different IT strategies," says information services director Shane Martin. "We've put in place a single strategy. A large part of it is putting in place the basic infrastructure; at the same time, we're looking to do some more exciting things, particularly with our clients, around the Internet."

The infrastructure rollout is challenging; however, not as challenging as balancing the need to get some of the basics in place - like the financial system - against the business strategy demands of delivering more to clients, and particularly selected clients. That requires a healthy mix of pragmatism and compromise, made necessary by inherent problems with the infrastructure, Martin says.

Changes, Changes.

With the move to integration, the firm is refocusing its strategy to concentrate on specific client industries and practice areas in which it is already particularly strong and that offer the best opportunities for growth.

Phillips Fox CEO Tony Crawford says the changes, which were announced in mid 1999, are because of a rapidly changing legal services marketplace that requires law firms to service their clients more effectively.

"The changes are aimed at us developing a truly client-focused structure," he says. "Integration will allow us to better use the ideas, knowledge and experience of a great many people across the firm and give our clients access to the most appropriately skilled practitioners quickly and easily, regardless of location.

"It will also enable us to have a consistency of approach and systems across our entire network, allowing us to reduce duplication of effort and achieve economies of scale - benefits we can pass on to our clients.

"Consolidating the firm's capital will also allow us to invest in new products, services and technologies. These will increase our ability to provide client-focused solutions that add value to our clients' businesses."

To enable it to realise this vision, Phillips Fox has become one integrated firm. It has a uniform basis of remuneration and performance management for all partners and staff in all its offices. It has also developed client service and business strategies on a firm-wide basis. The firm is managing policy development, planning and management of its corporate support services throughout its organisation. This includes finance, information technology, marketing and human resources.

The IS group will develop uniform systems and approaches over time. Its immediate priorities will focus on the firm's technology, financial and practice management systems and its approach to client development and management.

"Previously the IT state was very much office-centric. Now we have new business drivers which are far more geographically independent, so getting a lot of the basics in place has been taking a lot of our effort," Martin says.

"For example, having five different financial systems is a complicating factor. The priority for the firm is to get onto the one financial system. Unfortunately, for a law firm that's a fairly significant investment."

The firm over the last 12 months has also moved to reduce four different e-mail systems to one. It has moved to common desktop applications wherever possible against a backdrop where four offices have a fairly significant investment in Apple Mac technology on the desktop.

"We've got about two-thirds of our users in the firm familiar with Apple technology at the desktop level, entirely for historical reasons. Sydney, Brisbane, Adelaide and Perth all operate the Mac platform, while our Melbourne and New Zealand operations use PCs," Martin says. "That certainly makes resourcing a challenge."

"Our strategy [in this area] is implementing as far as possible common applications across those platforms. We're very much following a [strategy of using Microsoft software], with the choice of hardware platform rapidly becoming more irrelevant.

"But having said that, we're able to maximise the investment in the Apple technology that we've got. Some of it is fairly new, less than a year old; however, by moving to applications that are platform-independent, we're able to continue using the Apple investment for another couple of years."

In handling the integration, Martin says the importance of managing people's expectations cannot be underestimated - particularly in an organisation with a culture radically different from what he was used to in the corporate world.

Martin joined Phillips Fox after two and a half years as head of operations and technology, personal banking with the ANZ Bank. He was previously CIO of QBE. He says one of the main attractions that drew him to Phillips Fox was that it was a new environment, and very unlike the more conservative arenas he'd worked in previously. He claims that Phillips Fox demonstrated much higher than usual levels of innovation and none of the stodginess that is perceived of some of the larger law firms. Nonetheless, Martin concedes the culture of a law firm is substantially different from what he was used to in the corporate world - especially one in which five offices are in the process of becoming integrated and are looking to share resources across the organisation::

"Managing expectation [in the various Phillips Fox offices] and bringing all of our activities back to the common denominator of the business goals has been the biggest focus we've had," he says.

Healthy Balance.

For now the different financial systems remain the biggest barrier to providing seamless service; but it is not an insurmountable one, Martin says. Phillips Fox already provides a consolidated monthly bill to one client that receives information from the firm over the Internet. He says that while compiling that bill takes significant effort, it is an effort of which the client is unaware and which doesn't cost a cent extra.

However, infrastructure rollout is only as important as service to clients. Phillips Fox has a fairly focused business strategy within several industry sectors, particularly insurance and property services, that involves providing extranet capability to selected clients in support of their business.

To improve client access to its lawyers and to the various information databases managed by the firm, Phillips Fox provides clients with secure access to its computer system to: send and receive electronic mail messages review and edit documents on screen check the status of their matter on project databases access the firm's various information databases.

It also provides clients with electronic access to all papers, presentations, newsletters, law updates and checklists prepared by the firm's lawyers - online.

"A number of our larger clients can access an Internet site and get up-to-date [information] - including billings and [the status of] a given legal matter - over the Internet," Martin says. "The client that's been using that service for the longest period is based in London so communication, purely from a time zone difference, is an issue."

It can't be too great an issue because that London client has been using the Internet site for some time and says it has "absolutely improved" communication between client and law firm. Lawyers are not always well respected and trusted, even by the clients they serve. The Internet access has added to the transparency of operations and heightened the level of trust clients have in the firm, Martin says. That's largely because they can come in at any time on any particular legal matter and see its exact status, without having to play endless games or phone tag - or even e-mail tag - with lawyers.

Naturally, lawyers are delighted with the success; but it has also created its own problems, with more senior partners, as in any law firm, tending to expect that whatever they want or deem necessary will be delivered to them.

Thankfully, Martin says, the partner population, relative to Phillips Fox's competitors, is young and technologically astute.

"There's also a high proportion of women, and one of the challenges we have is supporting diversity in the workplace, which is a big feature here. Some law firms have the connotation of being sweatshops. Phillips Fox is actively pursuing a more flexible work environment. We actually have a number of partners who work part-time, so there is the need to provide infrastructure they can readily access from home or wherever they are."

In trying to deliver on so many competing demands, Martin says, Phillips Fox has found its corporate structure helpful, having a CEO, a board and external directors. "I'm not dealing entirely with partners and lawyers. At the executive level, of a team of nine, there are only four lawyers. That certainly helps things a bit.

"But certainly managing expectation within a culture where some of the partners have had a history of the squeaky-wheel syndrome - he who shouts loudest gets what he wants earliest - has been interesting."

For Martin, expectation management is a twofold process. He spends as much time as possible in face-to-face contact with lawyers. On the other hand, each office has regular partner meetings, which effectively operate like a shareholders' meeting. Here, Martin often takes the chance to stand up and talk.

"Our executive board meets monthly. There is a fair bit of cross-fertilisation of knowledge and understanding at that level; also enlisting my executive peers in a higher level of awareness of IT issues and, more importantly, IT priorities. We've basically got a number of key stakeholders that are able to spread the message," he says.

"I think it's that communication aspect, particularly in a place like this, that one cannot underestimate. E-mails to all partners only cut it if they're short and to the point because you can't make them read them. So I rely pretty heavily on the human factor there."

Cost Cutting.

Another project now under way involves the insurance side of the business. Martin says the business drivers in insurance, particularly around claims-handling, are all about reducing their cost. Large insurance companies employ what they usually call "a large panel" of law firms. In the last five years or so, competition in that area has been intense - to the extent that many larger law firms have in one way or another opted out of the more commodity-based legal work.

To ensure its continued competitiveness, Phillips Fox has just implemented a workflow system to help its lawyers manage the business processes, particularly in the insurance and volume claims area.

"The selling point for us, which has been enormously successful, is being able to deliver consistent, monitored and managed service standards to our insurance clients. Some of that has been coupled with the access to their matters over the Internet. We can deliver services at a far more competitive cost and really align ourselves more with our clients' business strategies - which I think is quite interesting as well," he says.

"In one instance, we've managed to fit into the insurance company's value chain or communication chain and communicate directly with and deliver an enhanced service to their clients. That's certainly taking the notion of supply change management into the professional services area a little bit further than it might have been in the past," he says.

Specialist Skills.

The development work Phillips Fox has done has been a combination of inhouse work with a bit of contractor assistance. Martin says the firm has not relied on any particular software development vendors in any recent software work, particularly on the Internet and workflow side. It has just engaged a software vendor to help with its financial systems project.

"We are quite selective in terms of getting the specialist skills from outside. We've been very happy with the services we've been getting."

Meanwhile, he says the biggest challenge ahead is for IS to become increasingly integrated with the business. Perhaps the greatest measure of progress here is that when Phillips Fox responds to a tender for legal services there is increasingly often a representative from IT at the presentation.

"We're very much putting out to our clients a single partnership face. I think there is, in this firm, strong recognition that IT is an absolutely vital ingredient in delivering an overall improved value proposition to our legal clients.

"Our challenge is largely about focusing on that aspect of the work and putting in place a program to complete a lot of the infrastructure and behind-the-scenes work. For instance, when it comes to the rationalisation of five financial systems - which we'll be kicking off early this year - making that happen with minimum disruption.

"For me the real challenge is that I could spend all of my time focused entirely on infrastructure work. However, if I did that, I suspect in six or 12 months the CEO would say to me: ‘what have you delivered to the business?' As I said, we have to have a strong focus on being involved with the business - even to the point of being around the table at tender time."

In the meantime, Martin is enjoying working in the relatively new environment of a law firm that has offices in Australia, New Zealand and Vietnam.

"Certainly it's interesting being in a place that has a strong focus on being innovative, and actively breaking out and being seen as being a modern, progressive firm.

"Phillips Fox has been like that for some time, but I think we're really taking the next step now."

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