The Hidden Costs of Attorneys Handling Their Own IT Needs
I am providing this post to advise my fellow family law attorneys of a huge mistake I made for the first two decades of my legal career – handling most of my firm’s IT needs myself. For instance, when one of our computers had a problem (and when we used PCs there were many), I thought the best course of action was to try to solve it myself instead of having a professional do so – as it would “save money.”
All of that changed late last year when we (finally) realized that the best course of action was outsource certain functions in order to allow us to spend more time doing what we do best – handling family law cases. We started using GlobalMac IT for our computer and network needs, and we are beyond pleased with the results. The following article from Tom Lambotte addresses many of these misconceptions that could be costing your firm more money than you ever imagined:
The hidden costs of wearing the IT hat.
Are you wearing the IT hat? Know someone who is? If so, I’d like you to consider this article an intervention, an attempt to compel you or that someone to get help. I define “one who wears the IT hat” as the person who is the primary go-to person for IT issues in their firm. This individual deals with the bulk of IT issues and prides themselves on the cost savings in doing it themselves. They often have an hourly IT person to call in dire needs.
The hidden problem is that the costs of taking care of IT yourself for your firm, far outweigh the perceived benefits. In most cases, this is in fact costing your firms tens of thousands of dollars per year. Most people calculate the perceived savings by simply looking at their P&L and seeing close to nothing on the line for IT services. This overly simplistic way overlooks the soft costs which quickly eclipse the cost of paying for proper IT services.
There are four primary concepts that need to be understood in order to help overcome and break down the limiting belief that doing IT yourself saves money. The first is an analysis of time spent by the one wearing the IT hat. The second attempts to quantify the hidden issues lurking in the shadows and their overall impact on employee productivity. The third relates to what I call the hobbyist principle. And the final one is the far-reaching impact of time spent (or not spent) on the highest ROI activities for the firm.
The time analysis takes two parts into consideration. The first is simply the time spent per month dealing with IT related tasks. In most cases, the one wearing the IT hat is a senior partner or founder of the firm, since they set things up from the start and are the only one that understands how everything is setup. The time he spends dealing with IT primarily consists of running software updates (Adobe, Microsoft Office, Java, Flash, Apple/Windows software updates and security updates, etc.) and basic, daily troubleshooting. Based on many years of supporting law firms, this is an average of 1-2 hours per computer, per month. For a firm with a staff of 5, that is 5-10 hours per month.
The second part of the time analysis is the impact of interruptions. Because everyone in the firm is dependent on this person when there is an issue, they are forced to interrupt that person to get their issue resolved. Some are quick, easy ones (5-15 minutes), some take more time ‘Googling’ around (15-45 minutes) and others take hours before eventually being given up on, at which point the IT person is reached out to (and is hopefully able to help in a timely manner). All these little interruptions add up. Let’s www.GlobalMacIT.com whip out our calculators here to properly comprehend the impact. Research shows that when interrupted, it takes an average of 23 minutes to get back to the previous task. Let’s be ultra-conservative and use 15 minutes and one interruption per day, which adds up to 300 minutes, or 5 hours per month.
Adding up the two parts of the time analysis above shows us that the person handling the IT in a small firm with a staff of 5, is actually spending about 10-15 hours per month on IT. With a conservative rate of $300 per hour, that is a loss in billable wages of $3,000- 4,500. One more point about time, viewing it form a different angles touches on work/life balance. You see, in most cases I have come across, the person wearing the IT hat cannot justify doing the updates and system management during prime daytime hours, so they end up doing it in the evenings or on the weekend, either way, they are taking away irreplaceable personal and family time.
“We’ll just deal with it.”
Without fail, every firm we have supported where someone has been wearing the IT hat internally, there are always a laundry list of problems that have been unreported and eventually surface. Potentially masking issues that can develop into bigger, more impactful problems and could easily be avoided with proper maintenance. Not once have I come across a firm where people sit around twiddling their thumbs waiting for something to do. The support staff and other attorneys are well aware that the person running the firm and, in this example also wearing the IT hat, has both important and urgent items that needs be addressed that take precedence over dealing with IT issues. This develops an “I’ll just deal with it” mentality; if they can find a workaround to the IT issues, they will seldom report it and just deal with it. Because of this, when we take over IT support, we are very proactive in coaching and teaching everyone in the firm to tell us about every issue, big or small. As this coaching process is repeated on our end, people always step forward with things that have bothered them for years. Small, medium and big issues that have just been dealt with.
A client in Texas recently told us they had a Secretary quit because of IT issues that could never be addressed. Let’s whip out those calculators again and calculate the cost of the impact to your staff’s productivity has on your firm’s bottom line. Payroll is, for most firms, the biggest cost by far. If people are wasting 10 minutes a day due to bugs in the setup, inefficiencies with the server, calendar, email, printers, etc; things they have just found workarounds with, that adds up to 200 minutes a month per person. With 5 people, that is 1,000 minutes, or 17 hours per month. What is your firms’ average fully burdened cost for a staff member? At a very conservative cost of $50 per hour, that is $850 a month. Over the year, that is $10,200.
Jack-of-all-trades, master of none. As cliché as this is, it is so true. When an attorney is taking care of IT themselves, unless it is the thing they do the most, they will always be a hobbyist and hence, never develop mastery. In most cases, how do things work out when your clients try to represent themselves and practice ‘Google” law? I’ll go out on a limb and assume these often end up being major ‘cleanup jobs,’ where it could have taken only 1/10th of the effort if you had taken on the case from the beginning. Why is that? Because you have developed mastery in your domain over the years, which allows you to assimilate all the details and think of the majority of possible angles. A ‘greener’ associate does not have the insight and experience as a seasoned attorney. Developing this mastery takes years and thousands of hours of focus. You will never be able to develop mastery in IT, when it is one of the many things on your laundry list of responsibilities.
The cost of being a hobbyist with your IT can be massive. The things you don’t know you don’t know will be far too long. For example, it could end up costing you your license, by not being able to convince a board of ethics that you took the proper preventative measures in securing your client’s data. It can cause hours or days of downtime for your firm with an issue that could have easily been prevented with proactive maintenance. It can cost you all of your client files and data because you setup a backup yourself that was ‘automatic’ 9 months ago, but did not realize the drive became disconnected 5 months prior.
Hobbies are fun, but I would not choose to be a hobbyist with something that has a huge financial impact on my business and personal life. Most people use a tax accountant because they are up to date with the current tax law, know what questions to ask and how to maximize their deductions. TurboTax cannot provide me with these insights. I do not want a tax hobbyist taking care of my taxes, nor attempt doing them on my own. I want someone who has developed a mastery in tax law, and that I can count on when I need guidance with a tax related question or event. I surround myself with experts and have built a team of superstar advisors, because I understand the value that can be added to me and my business using this approach. If you want a hobby, pick up cooking, fishing or golf, but leave the things that have a big impact on your firms to experts.
ROI in IT
What activities within your law firm generate the highest ROI? Driving the vision, focus and direction of the company? Working on the most profitable cases and clients? Or is it interrupting time spent on the above to running a software update or fix an email problem someone in your firm is experiencing? This last and final cost, the opportunity cost, is rarely reflected upon. The cost taking care of IT yourself is far, far greater than just the fact that you are spending 10-15 hours per month on IT. If you invested these newly freed up 10-15 hours per month on your highest ROI generating activities, what impact would that have on the bottom line of your practice?
In closing, I hope this intervention has been successful in helping you question previously limiting beliefs you or someone you know may be holding onto, by doing the IT for their firm themselves. Having an expert IT company with developed best practices for your firm can shift the role of IT from just something that has to be dealt with, to something that adds value to your firm. Through a holistic approach, the right IT firm can provide proactive support and implement solutions that can impact your bottom line and free up you and your staff’s time. Through a two-prong approach, they can first seek out, then address the root cause of the primary bottlenecks in your operations, help hidden issues surface to the top and address security concerns and implement better procedures. Then they can look at your firm as a whole and then work on implementing solutions that increase everyone’s productivity.
This article was written by Tom Lambotte, President, GlobalMac IT, and it is provided as an educational service. Thanks to Tom for his research and insight into this important issue and for graciously allowing me to share it with my readers.