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1.
INTRODUCTION [top]
Despite setbacks in the Internet industry this year, the
Internet continues to change and transform the way
businesses deliver their services. With lower overheads, we
are already seeing changes in the retail sector by cyber
companies including Dell Computers and Amazon, who are now
making serious inroads into the market share of their big
league terrestrial counterparts such as IBM and Barnes &
Noble.
What is still largely unknown is exactly how the Internet
will change the delivery of personal services, such as the
law. Will lawyers be immune from the dynamics of the
marketplace? How is the adoption of the Internet by lawyers
different to its adoption by business generally? Before we
can answer these questions, we need to understand how
lawyers are using the Internet now.
2. INTERNET ADOPTION BY LAWYERS
[top]
Earlier this year, as part of my Masters studies, I
undertook a study of Brisbane law firms to ascertain
Internet adoption rates amongst small, medium and large law
firms, as well as how they were using this new technology.
Whilst similar studies are planned for N.S.W and Victoria,
the findings for Queensland would probably be reflective of
the national legal e-landscape.
The study was based on a random sample from the total
population of Brisbane law firms as at April 2000. The
sample size represented just under 4% of the total law firm
population.
The selected firms were then categorized as small, medium or
large based on the following parameters:
Size Definition
- Small 1 or 2 partners
- Medium 3 - 9 partners
inclusive
- Large 10 or more
partners
The random sample included
law firms from both CBD and suburban locations and in all
size categories. The selected law firms were asked a series
of questions relating to whether they were connected to the
Internet and how they used it in their day-to-day business
operations. The collected data was then assessed using
quantitative methods.
What are the Internet connection rates amongst law firms?
The results found that the Internet adoption rate amongst
law firms was high, with all firms in the medium and large
categories being connected, and 73.3% of small firms being
connected. These are even higher than the connection rates
for businesses generally (Small Business Index, May,
1999).
All firms in the sample who were not connected to the
Internet (26.7%) fell into the small size category. They
primarily gave one of the two following reasons for not
using the Internet:
- they could see no
benefit of the Internet for their practice
- they did see benefits,
but did not have the time/resources to implement it
Another interesting finding
was that all large firms had connected at an earlier stage
than either their small or medium counterparts (all large
firms in the sample had connected before 1998). Medium and
small firms have been slower to connect, with the majority
only connecting in the last 2 years.
With respect to having a web page, rates were very high
amongst large and medium firms, and very low amongst small
firms.
TABLE: Do you have a Web Page?
| Size
|
Yes
%
|
| All
|
33.3%
|
| Small
|
13.3%
|
| Medium
|
66.7%
|
| Large
|
100%
|
When we compare these
figures with those for Australian businesses generally, we
see that more small businesses in general have web pages
(18%) than small law firms (13.3%), but larger law firms
(66.7%-100%) outpace large business enterprises generally
(48%) in web page adoption.
Further, the reasons for having a web page seem to be
fundamentally different between businesses in general and
law firms. When asked for the perceived benefits of having a
web page, most law firms advised that it was to provide
information and an electronic presence to their existing
clients. Large law firms also felt that a key purpose of
their Web site was to attract new employees. However, the
main reason cited by Australian businesses for a web
presence was to grow their business by expanding into new
geographic regions and gaining new clients (Small Business
Index and ABS statistics).
What Internet services are small, medium and large law
firms using?
The results of our study reveal that all sample firms who
were connected to the Internet use it extensively for
communication functions (email), and for collecting
information (legal and non-legal research).
Email is the most popular use of the Internet for law firms.
When asked to rate who they communicated with most
frequently using this medium, sample law firms listed the
following in priority order:
- for communication with
Queensland based clients
- for communication with
other law firms
(NOTE: Internal
email would be the most popular form of communication but
was not included in our study as it is not, strictly
speaking, an Internet service).
It is interesting to note that 91% of the clients of sample
law firms were located in Queensland. Even the large firms
in the sample (apart from one) stated that over 80% of their
clients were Queensland based. This is despite a number of
the firms in the medium and large categories being part of
national and international legal groups. For small firms the
percentage was even higher, at 96.7%. Clientele for Brisbane
based firms would
therefore appear to be still largely local (State based) in
nature, and their email communication reflects this.
Regarding communication with other law firms, many law firms
commented to us that whilst emailing other firms was fairly
popular, there was still some hesitancy to use it too
extensively for this purpose. The primary two reasons
expressed were:
-
Some
still felt uneasy about the acceptability of email
correspondence for matters where it may need to be
produced as evidence before a Court. In these instances
the more conventional means (for instance, mail and fax)
were used; and
-
Others
felt that the informal nature of email communication
meant that it was often not appropriate between
contending firms.
These barriers were not
seen to be relevant when communicating with clients.
It is interesting to note that Australian businesses in
general (72%) appear to be using the research function more
frequently than the law firms (50%) in our sample, despite
the fact that the latter are providing primarily an advisory
and information service. For small law firms the percentage
was even less (33%). Fast and cheap access to current legal
information via the Internet would appear to be a real
opportunity for smaller firms to bridge the resource gap
between themselves and the larger legal players. However our
statistics show that, overall, it is the medium and large
law firms that are utilising this resource, and not the
small firms.
3. WHAT INTERNET SERVICES ARE
SMALL, MEDIUM AND LARGE LAW FIRMS NOT USING?
[top]
All law firms who participated in our study identified four
Internet services that were
rarely or not used. They are:
- Searching/collecting
information on products and supplies
- Internet Advertising
- Buying products/supplies
- Selling their legal
services over the Internet
These four services
represent the e-commerce aspects of the Internet. In
particular, small firms in the sample indicated virtually no
interest at all in these E-commerce services. Large and
medium firms showed more interest and were beginning to
explore the various e-commerce services, particularly
collecting product information (although not for making
actual payments online).
4. E-COMMERCE ADOPTION BY BUSINESS
AS COMPARED TO LAWYERS [top]
E-commerce adoption by Australian businesses generally is
also low, although greater than adoption rates amongst the
law firms in our sample. In particular, Australian
businesses are using the Internet to market and advertise
far more frequently than law firms. Our sample results
indicate that advertising is either 'Not Used' or 'Rarely
Used' by the vast majority of law firms in all size ranges.
In contrast, the Small Business Index (May, 1999) recorded
that 38% of businesses overall regularly advertised and
marketed their products/services over the Internet. Our
study did not go into reasons why this may be so,
although many sample participants in all size categories
explained that they did not feel that advertising on the
Internet was conducive to their image in the market place.
The legal profession's overall conservative approach to
advertising in its more adventurous forms may also stem from
the long tradition of advertising restraints that have been
placed upon it in the past.
More insight into why the sample law firms are not using the
Internet for E-commerce activities (particularly marketing)
may be gleaned from the results of what law firms saw as the
Internet’s main benefit for their practice.
TABLE: Main Benefit of the Internet
| Size
|
Marketing
to new clients
|
Internal
cost efficiencies
|
Improved
quality of service
|
| All
|
23.8%
|
52.4%
|
19.0%
|
| Small
|
26.7%
|
53.3%
|
13.3%
|
| Medium
|
33.3%
|
33.3%
|
33.3%
|
| Large
|
0%
|
66.7%
|
33.3%
|
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5.
SUMMARY AND CONCLUSION [top]
The results of this study have highlighted the following
trends:
- Large law firms are more
likely to be connected to the Internet and to have a Web
page than small firms. However adoption rates for law
firms are high overall, similar to those for Australian
businesses generally
-
The
two most frequently used Internet services are
communication services (email) and information access
(research) and firms of all sizes are using these
services frequently.
-
The
e-commerce aspects of the Internet are not extensively
used by the sample law firms, although large firms are
starting to explore these services
-
Law
firms of all sizes are using the Internet primarily to
gain internal cost efficiencies and to improve the
service that they provide to their existing client base.
They are not yet using the Internet to pursue growth
strategies.
Given the small sample size
(4%), many of the above results are indicative of trends
only and caution should be exercised when using these
findings to make inferences back to the entire law firm
population. As firms continue to embrace this new
technology, there will be a ‘ripple effect’ on how they
deliver their services in the future.
This appears to be appreciated by the legal profession
itself, with over 85% of law firms in our sample stating
that they believed that the Internet would fundamentally
change the way they conducted business over the next 5-10
years. Not all firms, when queried further, however, knew
exactly how delivery of their service or their practice
would change, or how they should meet the challenge of this
new technology.
In the next Article, we will look at how the Internet may
impact upon the way law firms do business in the
future.
Ann Janssen
BA.LLB (Hons)
ann.janssen@legalmart.com.au
Copyright. July 2000.
All rights reserved.
Thanks go to Michael Fitzgerald who was co-researcher on the
Brisbane Law firm survey.
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