I recently proposed a portfolio approach to evaluating law firm IT and KM projects, suggesting a focus on initiatives that increase profits. Two innovative actions by large UK law firm Eversheds help illustrate the idea. 

Eversheds set to transfer 90 staff in IT outsourcing deal in legalweek.com (August 2006) reports that “Eversheds is outsourcing the bulk of its IT function to an external provider…” It also reports that magic circle firms Allen & Overy (A&O) and Linklaters have also secured further back-office outsourcing deals. The Eversheds deal “is understood [to contain] provisions to outsource various core support functions including Eversheds’ helpdesk network, infrastructure teams and its IT training specialists.”

Core IT infrastructure, while critical to a firm’s success and a competitive necessity, is purely a cost . It consumes money and management attention without conferring strategic advantage. So it is doubly interesting to see another Eversheds initiative…

Eversheds to test applicants for online reasoning in legalweek.com (Sep 2006) reports that “Eversheds is to introduce new online reasoning tests for potential trainees as the national giant bids to widen the net in recruiting future lawyers.” The test will cover verbal and numeric reasoning. As a quant jock myself, I like that that lawyers should have some quantitative skills. According to one firm manager, the online test will help students who have not done so well academically. What a concept – grades might not be the only predictor of lawyer performance! The firm expects the test to help hire the right people and therefore avoid costly mistakes.

With this second initiative, the firm is spending on an IT-backed expecting to retain more or better lawyers and reduce hiring mistakes – and that means higher revenue and profits. So are Eversheds’ moves are an outlier or harbinger? I can’t say that Eversheds applied the 4-quadrant analysis I proposed, but in my view, the firm is thinking appropriately about managing the IT portfolio.