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Editor's Note: This is part two of two articles focusing on the legal services market. Read part one for an overview of the legal vertical and its unique challenges for service providers.
IT service providers may find themselves having to work a little harder in the legal services market than they will in other types of verticals.
For one thing, the technology needs of law firms are different than other types of business organizations, with some functions, such as time and billing, docketing and client management, critical to a firm's success. Their organizational structures can complicate the sales process, as well, demanding service providers to take a different sales approach than they would otherwise. Additionally, despite their reliance on technology, law firms have a reputation for being difficult clients to work for.
Some IT channel companies have chosen to embrace the legal vertical. Fluid Designs Inc., an IT services provider in Union, N.J., not only decided to target law firms but has built out its practice with service areas that cater to law firms specifically.
Fluid Designs works with small and medium-sized businesses and customers in the dental and healthcare vertical but has focused on the legal vertical since 2010. The company now has more law firm clients than any other client type, many of whom they acquired within New Jersey's close-knit legal community through referral rather than through any direct marketing efforts.
"[Referrals were] a big game-changer for us," said Stanley Louissaint, president of Fluid Designs. "Having a prominent attorney refer [us] to another prominent attorney and that whole buddy-buddy system … has been extremely instrumental in terms of how we have been moving forward." He added that referrals are "the keys" into the legal vertical based on his experience.
In addition to managed services and break/fix services, Fluid Designs provides two other service types geared specifically to legal clients: E-discovery and litigation support services and computer forensics. One of the benefits of having these two practice areas, Louissaint said, is that the clients of Fluid Designs' legal clients often become Fluid Designs' clients, too. "We're able to manage the customer's infrastructure because that's what they hired us for, and, in addition to that, we're able to help their clients with their legal matter and generate extra revenue at the same time, because we have the expertise," he said. "That's one of the value-adds that we bring. … We have a few angles we could hit when we're trying to work with a legal client."
The individual needs of attorneys
Fluid Designs has adapted to the legal vertical market by customizing its IT services to the particular needs of the attorneys that the company works with. "You have to figure out what's important with each person that you're dealing with [and] how they operate," Louissaint said. For example, even though a lawyer might have an office, he might work from his home all or most of the time and remote into the office. He said one of his attorney clients likes to start working at 11 o'clock at night and so requires technical support in the afterhours.
Stanley Louissaintpresident, Fluid Designs Inc.
To figure out what's important to legal firms demands good listening skills, Louissaint added. "Believe me, if you listen, the prospect tells you exactly what they need help with, exactly what they need."
Broadly speaking, though, Louissaint said all of Fluid Designs' law firm clients rely heavily on uptime. "[Law firms] need their systems to work. … They're not making money when it's down. There is a cause-and-effect relationship that is very tangible in a legal office. If the system is down … then they can't bill a client, which means in that moment they're losing revenue."
But many firms may struggle to understand how service providers can support their practices. Accordingly, service providers should steer clear of "geek speak" and communicate with clients in a language attorneys will understand, he said.
"One of the top challenges [in the legal vertical market] is getting people to understand that they need to pay for this service. … You have to help them understand the value of what you're providing," Louissaint said. "No one wants to sign a contract and feel like they're stuck."
But when you're successful in helping a law firm understand what it's paying for, he said, you have a client for life.
Why ComptronX 'ran away' from the legal vertical
Not all IT service providers are fond of the legal services market. Steven Tessler, IT services veteran and owner of ComptronX, an IT consultancy based in North Andover, Mass., said at one time law firms made up 80% of his company's client base but since about 2003 ComptronX has dropped all but two of its law firm clients.
Historically, while lawyers were one of the first groups of businesses to embrace computers, many of them have never been fully comfortable with technology, Tessler said. "[Attorneys are] bright people, but they're hesitant to change. It wasn't unusual for years for an attorney to have an automated time management system and also keep a diary … an exact duplicate, because they didn't believe the accuracy of the automation. … Even young lawyers at the time, fresh out of law school, who you thought would be comfortable with the technology, really weren't, because they were never taught to be comfortable. They were taught to question everything. So they did," he said.
Back when ComptronX had firmly established itself in the legal vertical, the company offered consulting and break/fix services and assisted with training employees. Like Fluid Designs, ComptronX acquired the majority of its legal clients through referrals and word of mouth. "[The clients] were happy with us. They would be at a bar association [event] … and would reference us, and the next morning we would get calls," he said. While ComptronX never engaged in any targeted marketing, the company did invest in training to better understand legal processes.
Tessler found law firms frustrating to work with, partly because of the problems created by trying to work with multiple partners in a firm, each grappling with their own understanding of the firm's overall IT needs. Such a dynamic can draw out the period of time it takes for the partners to make technology decisions. "From an MSP, break/fix, or consultant viewpoint, you spend some labor creating the quote -- for which you don't get paid. ... You do the research. You do your due diligence. … You present your proposal [and] you hand it to them. They ask you to come [back] in. You sit down. You talk to the partners. You explain the whole thing again. They say, 'OK, we'll get right back to you.' And then it dies. And then you wait a week, a month, three months. Then they say, 'Come back in. We have some other questions.' And you go back again. Now, in that three or six month period, things can change," Tessler said.
Other frustrations involved clients demanding estimates of work before Tessler could even investigate into the technology or environment to find out what was needed. When clients had IT issues, they could be uncooperative, which would only add to the amount of time it took him to determine the source of a problem, resulting in the firm being unhappy with the final bill. Tessler also said he encountered a good deal of frugality toward technology investments in the legal vertical. He recently fired a firm because it refused to invest in what it needed in order to comply with the Healthcare Insurance Portability and Accountability Act.
Working with clients on your own terms
Unlike Fluid Designs, ComputronX has a "take it or leave it" approach to law firms, working with its two existing law firms only under the condition that they purchase managed services. "I require them to have remote management. I require them to have a hosted managed antivirus. I require them to have firewall appliances in place. Or they can go with somebody else, because I don't need the aggravation," Tessler said. "Your primary obligation is to help them protect themselves. That's what we do. That's all. We protect the data."
When asked if he'd be open to working with more law firms again, Tessler hesitated to say yes or no. "I'd have to really think about it nowadays. It would have to be on the individual-attorney basis. … If you want to save pennies and use a free antivirus off the Internet, [then] no," he said. The legal firm would have to be willing to invest in the security technology it needed and follow ComputronX's recommendations on proper user behavior. "I have one client who calls me 'The Emperor' because I will not allow him to do things he wants to do," such as access Facebook on work computers. "But we haven't had a virus in decades," he said.
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