In spite of hesitation and myth surrounding enterprise resource planning, keeping up with new solutions is a huge potential benefit to law firms, says Martin Telfer, senior vice president at Fulcrum Global Technologies.
Everyone in business knows about ERP. Or at least they think they do. Perhaps that is why this acronym for Enterprise Resource Planning does not always get lawyers excited when they see or hear it. But, for every lawyer operating in a competitive, increasingly cross border environment – and that means most of them – it should.
Globalisation is changing the world in which their clients operate, shifting business activity from a series of semi-isolated economies towards a single, more integrated global economy. This integration creates interdependence, driving ingenuity and fuelling innovation.
Unlike innovative technologies of the moment, such as AI or blockchain, ERP may not generate the same sort of zeitgeist headlines that capture lawyers’ attention. But, although the concept has been around for more than a generation, ERP’s international application has moved on at an equally dynamic pace since it was first applied to inventory management and control.
ERP’s true strategic value is fully appreciated by those who think globally as well as nationally and locally. That explains why the Big Four accounting firms became early adopters of SAP technology for their global ERP systems, which have since elevated their standards and practice, enabling them to expand their service offerings substantially. Most tellingly, they are beginning to evaluate their latest option to intelligently use Fulcrum SAP technology to support their increased, and increasingly competitive, legal services footprint. This will add to the already significant pressures being put on traditional law firms by cost-sensitive clients seeking better value.
Across the world, over 20,000 professional services firms of varying sizes have decided to follow in the Big Four’s footsteps by using ERP, supported by the same SAP technology which is used by 80% of the Fortune 500 companies. In line with their clients, an increasing number of law firms recognise that integration delivers more than just putting assorted functions into one complete system to streamline processes and information across every jurisdiction. It also enforces best practice, and standardization, in addition to meeting and adhering to statutory or regulatory compliance regimes.
For example, SAP is Uniquely certified by the BSI as being GDPR compliant in the UK, and by other EU countries. Critically, law firms that use Fulcrum SAP-based ERP systems also realise that a shared database supporting multiple functions can also deliver tangible benefits to clients in the quality, accuracy, and timeliness of the service they provide. In short, it adds real value that clients really notice, and raise frequently in client satisfaction reviews.
Up to Scratch
Yet despite what could be, and indeed is for some, the reality for many law firms remains rather different: as late adopters of technology, a mixed bag of immature legacy systems proliferate, sometimes cobbled together with insufficient planning. Even within larger international law firms, there are often disparate systems across their global network, struggling to manage the multiple needs of one organisation, let alone global clients. In trying to operate seamlessly on a standardised basis, while delivering global clients a quality service, a patchwork of old systems is really not the way to go.
Cybersecurity is another perennial concern to every business, and law firms have not been immune from attacks, with myriad examples of hackers causing damage and business interruption. Beyond continuous training and robust security procedures, adhering to client and jurisdictional guidelines is paramount. To achieve this while controlling costs and managing a more efficient organization is challenging.
Deploying an ERP system using Fulcrum GT’s technology does more than help. It also delivers scalable, proven, and highly efficient automated processes, and where appropriate, allows individuals to contribute manually in a best practice workflow or solution. As a result, client service delivery is effective, efficient, and secure.
So how is this achieved in practice? Fulcrum’s Snap™ solutions are process-based, not transaction-based. They are built on SAP S/4HANA, and enable law firms to consolidate data and processes that were previously managed across assorted systems, combining client, people, and financial data. In doing so, they create a continuity between departments and offices that allows best practices to be deployed firm-wide.
Snap™ acts in real time, updating records and systems instantaneously, and it provides flexibility – as circumstances change, so does the supporting business system. This flexibility addresses a common concern among law firms: being able to maintain local flexibility, while still running a global firm.
In summary, Fulcrum’s Snap™ solution offers best practice data validation and process standardisation, running on an in-memory platform that is quick and efficient. It provides a single global source of truth: one point of reference which helps move data out of silos, creating data standardization and the ability to run operational and financial reporting out of a single system for comprehensive visibility and transparency. As a scalable global platform, it is operated by our clients in nearly every country, and runs in more than 50 languages, with all major currencies built-in.
Any category of data – structured or unstructured text, even social media data – can be imported, analysed, and used. Without a single global platform, some tools that firms want to adopt, such as AI and machine learning, can become difficult to deploy in the absence of clean, high-quality data.
Firms can take advantage of a much more flexible approach to financial reporting: instead of the traditional month-end financial close, which often takes many days, they can just close. And at any frequency too since everything is in real-time. That can extend to a decrease in audit costs, in the days to close the books on a weekly/monthly/annual basis and the cost of analysis and reporting, as well as external auditors’ familiarity with the system – it’s all built into the tool-set.
Combined together, the speed, flexible processes, and high-quality data help to deliver on the promise of a real-time organisation rather than a reactive or batch process company. That extends to external perception too: clients see their law firm operating consistently at best-practice levels of technological capacity in every office.
For some law firms, there can be a misperception of ERP – that cost is prohibitive because of the time taken to implement. Lawyers may believe that it’s too big, too complex, too rigid in nature, and that it may not fit culturally with how their firm operates.
But a clear distinction exists between the culture of a firm in how its lawyers interact with each other and with clients, and the professionalism of its technology in standard procedures relating to the pricing, billing, and reporting of services they provide. For every firm, that process should not be overly complicated. Even the largest, most successful firms need simplicity: taking in all their time-related data, having all their clients and data in a single place, and billing every client effectively efficiently, and in compliance with the clients’ requirements.
However distinct the culture and specialist expertise of each law firm, the technology to collate and deliver this information is not part of its core competencies. They should not have to spend valuable time worrying about the management of a large systems infrastructure and its different interfaces. From an operations perspective, they should not need many billing staff – if there are standard processes and defined templates so that client invoices are collected on in a timely fashion.
Implementation is another key concern. Because it is perceived as complex, many lawyers think that it will take two or three years to implement. Industry best practice derives from our experience with clients together with that of SAP, which has a wealth of experience in servicing the world’s biggest companies. Accordingly, in most cases, we can deliver for most mid to large size firms in six to 8 months, and for some firms in as few as 3-4 four. Such rapid deployment should not significantly disrupt an organization as the transition is completed.
So how and where is it done? Law firms can take Fulcrum’s Snap solution on-premise, using their own hardware, in a virtualized environment – on-premise, but with a hosted infrastructure – or as a cloud-based SaaS deployment with a private managed cloud. For the latter, as security is paramount, our private managed cloud environments are offered using bare-metal servers: single, specialised dedicated pieces of hardware that only run Snap for that firm. By moving to the cloud, firms do not lose functionality but instead gain in scalability, flexibility and potential savings on IT resources.
Fulcrum is partnered with IBM as our global infrastructure provider. This delivers many benefits. IBM has SAP-certified appliances and are fully security compliant: ISO-27001, SOC 1, SOC 2, SOC 3 and GDPR. This is a real benefit for firms transferring to the cloud and using it to access data, break down silos, and perhaps move towards the client demands of today’s Processors. The cloud allows that to be achieved cost-effectively and quickly. As law firms merge or experience rapid organic growth, setting up additional offices is straightforward. The IBM partnership allows this to be completed in a matter of hours while obeying many jurisdictional bar rules.
Cloud-based solutions not only make ERP investments more affordable, they also make systems easier to implement and manage. By next year, industry analysts believe that four out of every 10 large organizations will have at least 60% of their ERP applications in the cloud. Will your law firm be one of them?
Written by: Martin Telfer
Martin joined Fulcrum GT as SVP/EMEA Chief, responsible for the European and AP markets. Martin Telfer is the former CIO at Baker McKenzie who led Baker’s significant SAP project which went live in late 2014 across 78 offices in 50 countries.