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Is ERP the Future Infrastructure of Large Law Firms

This is a live blog post from Legal Tech NY of the session Why ERP Now for Law Firms?, presented by Martin Telfer, Global Director, GIS, Baker & McKenzie (“BM”).  

BM has 70 offices in 40 countries with 10,000 users. BM currently uses Elite Enterprise with 50 servers around the world. It’s costly and complicated to maintain. “It’s becoming almost unmanageable.” Because of the customization done in Elite long ago, the technology has become “fragile.” This Elite product is near the end of its service life. Processes are not unified across the firm; because each office has a server they can – and do – make local customizations. Further, because of local custom, offices pull data for Elite and often re-enter data in another system. Consequently, there is a lot of duplication and inconsistency across the firm.

New business demands also give rise to new technology requirements. Client demand for flexible billing arrangements means new analytic and reporting requirements. The firm needs to manage profitability across many billing options. The firm no longer wants duplicate bookkeeping across offices. BM wants more integrated systems to support more cost-effective cross-selling. The current weekly build of a global data warehouse no longer suffices to meet the demand for real-time analysis.

Current obstacles include: client information is fragmented. Client names vary across offices. Once weekly reporting does not satisfy partner needs. Finance has too many people. Finance is larger and more expensive (human costs) than IT. The data warehouse can only hold 3 years but firm needs 5.

What is the firm to do? Looked at Thomson’s new product (Elite upgrade) and Aderant. The law-firm specific features are good but there limitations. Language is a big one. Another weakness is strategy and reporting. Dealing with multiple currencies is too hard. BM does not have expertise on statutory reporting globally and neither does vendor.

So BM look at SAP. The replacement infrastructure with SAP will be much simpler – a single instance of SAP firm- and world-wide. In addition, it offers: full coverage on all languages; statutory reporting in all locations; proven performance in a single instance; law-firm specific functionality; opportunity to define product functions and features; scope and scale. SAP does NOT have law-firm specific know how but its partner Tata does. BM is helping Tata come up to speed on law-firm specific requirements (and defining overlay software functionality).

When Telfer first announced a single instance product, there was an outcry in the offices. But as he demonstrated it around the globe, resistance melted. Performance was not an issue with the web-based interface. Blue Arc accelerators help with performance for SAP and other systems. This had been modeled at SAP’s labs in Waldorf, Germany in advance.

Other benefits over time of using SAP will be conflicts and intake, HR system, and CRM. Will eventually use to manage professional development and CLE. Maybe eventually global payroll.

Once the firm evaluated the options, choosing SAP was a ‘no-brainer’. Telfer recognizes that many in market think BM is crazy. He characterizes law firm requirements as much less demanding than the typical SAP instances. SAP resources are less expensive than Elite resources. Says implementation time is about 16 months. It will do all law-firm specific functions. Tata Consulting Services has been very responsive in building the law-firm specific function.

I ask about document management. Currently on Open Text. Looking at SharePoint. Maybe eventually. WAN connectivity is a big challenge because moving large files, even with accelerators, is too big a problem. Will probably use a regionalized version of SharePoint.