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Why you need to switch to digital client files now

Here’s a question that’s posed to me from time to time: “What do you see as the biggest technological issue facing law firms?”

My answer: the stubborn insistence of so many lawyers in clinging to paper client files.

In my opinion, every single lawyer needs to commit to using digital files.

I know the list of excuses by heart: “I can’t read long documents on a computer screen. … I can’t type. … I’m completely computer illiterate. … I just like the feel of a paper file in my hand. … I don’t have time to relearn anything. … I’m already working myself to death.”

Well, at the risk of offending some, you need to get over it. If you need to buy a more expensive monitor to read your documents more easily, just do it, because you are putting the future of your law practice at risk and putting your clients at risk by clinging to the traditional paper client file.

There are a few exceptions to this rule. If you are a $500 an hour senior partner at a big firm, you can pretty much do as you please and your associates can manage digital client files for you. If you have a very limited practice with matters of short duration – for instance, you only do DUI defense in one municipal court – then perhaps you can continue on in the old-fashioned way for another decade.

But the rest of us have to use modern practice tools.

Stop thinking of PDF file as a computer files and start thinking of them as digital paper.

Let’s discuss briefly why it’s dangerous to continue to use paper client files:

• You cannot back up paper.

It is simply too expensive to make a copy of every sheet of paper in a client file and store it offsite to protect against destruction. If your office burns, you need to be able to buy new computers and restore your practice to working order, not worry about replacing the paper that burned.

• You are becoming increasingly less competitive.

Lawyers with digital files can look at any file in seconds without getting up from their chair or disturbing their staff. The practice of law is an increasingly competitive business. The fact that you take five minutes to do things other lawyers can do in five seconds is like running a race with ankle weights.

• You are wasting time looking through files and looking for lost files.

Be honest. How much time do you and your staff spend each week looking for lost files and lost documents?

Digital client files do not get lost in the office, nor do they get accidentally left at home or in the car. Misfiled digital documents can usually be easily located with desktop search tools.

And if you have your staff prepare a complete document index for paper files with tabs for every single document, and update it every time a new document is placed in the file, consider just how much that costs the firm in often-nonrecoverable expenses.

• You are spending too much time and money converting digital documents into paper.

When we first started talking about the paperless office, it was a matter of converting all of the paper you received into digital paper. Now the modern lawyer receives many of the documents that need to be in the client file in digital format.

To have a complete paper client file means printing (and then filing) e-mails, pleadings that were e-filed by opposing counsel, electronic research results, e-mail attachments that clients send and a number of other things.

• You are missing the opportunity to become more affordable.

Many individuals believe that legal services are too expensive. I’ve heard several lawyers note that even though they make a good living they wouldn’t be able to hire themselves without borrowing money. There’s something wrong with that.

Corporate clients are now focused on reducing legal costs while increasing the predictability of the amounts they pay their lawyers. Consumer clients will always be attracted by lower fees. Lawyers are already pricing themselves out of certain markets.

For almost all law firms, the greatest challenge of the coming decade is to reduce the cost of legal services without reducing the quality of service or net income for lawyers. The efficiency of digital files may provide a good part of the answer to that problem.

• You are blocked from having access to your files when you may need them.

Relying only on physical paper files means you can only work on your files when you are in the office or when you take the file home. (And when you take a file home, no one else can work on it.) But you cannot take home every paper file for every client who might have a weekend or evening emergency.

You also may end up stuck at home without warning, watching a sick child or waiting on a repairman. Having complete digital client files means that you can use any one of a number of tools to log in to the office remotely and access all your files.

• You project an image of being behind the times.

If you hire associates, they know from their peer group what is going on in other firms. More firms than you may believe have already transitioned to digital client files. I’ve heard associates at conferences all across the country make reference to the partners at their firms being dinosaurs. Clearly they will consider their future options, and joining the dinosaur herd as partner may not be the most attractive one.

No one is saying it is easy to change the way you have always practiced law. But the tools are available. Practice management software allows you to organize all parts of the digital client file. Document management software permits firm management to force compliance with digital client file policies and to more easily reuse prior work product to save time and reduce legal fees. Desktop search software can help locate misfiled digital documents. Scanners can convert physical paper to digital paper. PDF creation and management tools allow you to transform word processing documents and e-mail into permanent digital documents suitable for the client file. Consultants and vendors stand ready to help.

Here’s the bottom line: increasingly, everyone who looks at the issue is concluding digital client files are not just desirable, but absolutely necessary for law firms to prosper in the future.

Jim Calloway is the Director of the Oklahoma Bar Association Management Assistance Program. He publishes the weblog, Jim Calloway’s Law Practice Tips at http://jimcalloway.typepad.com. He serves on the ABA Law Practice Management Section Council and is also chair of its Practice Management Advisor’s committee.  He is a frequent speaker on law office management and technology issues.

7 comments

  1. I wonder if most people that aren’t comfortable with switching feel they have the opposite feeling on missing files. That they never seem to be able to find things on the computer. That is where IT professionals need to really do a good job for the lawyers and setup systems with very good search capabilities.

  2. Great article Jim. In our experience implementing electronic document management systems, the biggest obstacle is the status quo. “That’s the was things have always been done” is a phrase we hear often. Our response is usually something along the lines of “That doesn’t mean there’s not room for improvement.”

    For example, 10 years ago, email was still considered a novelty, or something for “the kids” to use, but no appropriate for senior partners. Now that we have email accessible on our Blackberrys, iPhones, and other smartphones, can anyone imaging working without access to email anytime or anywhere?

    Our software comes bundled with an iPhone and Blackberry client that allows you to access documents anywhere the same way you would with email. This means you can be in an airport lounge or the back of a taxi and still be able to read documents, comment on them, and collaborate with your staff.

    To learn more visit our blog at http://blog.aisww.com

  3. The only strong argument against going completely digital that you don’t appear to me to have an answer to is that paper files don’t crash at trial. I fear that the eyes of my client, the judge, twelve jurors, the court reporter, clerk and opposing counsel could be burning into me while I’m trying to get my crashed laptop, printer, or projector working. What should one do to eliminate, or at least minimize this problem?

  4. How would you advise a very, very small law firm that has no dedicated IT person and which is balancing sufficient staff numbers to effectively support lawyers as they service clients’ needs against the challenging economic climate? What are the beginning steps toward “paperlessness”?

  5. As an IT technician, who prefers to be invisible, from an information technology standpoint, because everything is running well, going paperless has to be done gradually. It starts with getting everyone (IT, end-user, software/hardware vendor) on the same page. The paperless office, to some, is like teaching an old dog new tricks. New tricks can be learned by using the old ones already known.

  6. Great article! This needs to be retweeted to every lawyer (although most lawyers on twitter probably do file electronically I guess!)

  7. @ JAnderson we work with small firms with outsourced IT, and we have several strategies for helping them. First, you want to pick a software that is reliable and stable, to minimize downtime. Second, you’ll want something that is very user-friendly and intuitive so extensive training is not required. Finally, you’ll want a system that is robust and can scale up so as the business grows they don’t outgrow the software.

    In regards to the scanning of existing files, if the office does not have the staff to perform the scanning in-house, contact a licensed, bonded, and insured service bureau to perform the scanning work. Most places charge around 10 cents a page, depending on the condition of the documents.

    To learn more visit our blog at http://blog.aisww.com