The ILTA/InsideLegal Technology Purchasing Survey: The Good, the Bad, and the Baffling

October 7, 2016 —

For the last 10 years or so, ILTA has partnered with InsideLegal to survey ILTA member law firms on their technology purchases. Here are some things we found interesting about this year’s survey compared to past surveys.

The Good: Data Storage and OCR

Law firms don’t seem to have as much interest in doing their own data storage as they used to, possibly because they’re outsourcing this to Dropbox, OneDrive, and so on. This is good news if only because law firm IT groups implementing Dropbox or OneDrive clones probably isn’t the best use of resources. (Interest in Microsoft SharePoint, which includes document storage features, has dwindled to almost nothing, possibly because of Microsoft OneDrive.)

datastoragechart

(This chart and the ones below show the percentage of surveyed law firms who said ‘yes, we purchased something in this category in the last 12 months’ in a given survey.)

Also, law firms seem to have somewhat more interest in scanning and OCR than they used to (but this isn’t altogether clear – this chart could simply mean that all the scanners that law firms bought 10 years ago are finally being replaced). Anyway, well-constructed PDFs with searchable text data are better in almost every way than pieces of paper, so law firms being more interested in scanning and OCR is probably good news.

scanningchart

The Bad: Desktop PCs

Law firms’ continued interest in buying desktop PCs seems a bit backward.

desktoppcschart

With a few exceptions (that really only apply to non–law firm, third-party service providers – for example, sophisticated statistical analysis and CGI-heavy motion graphics for a courtroom demonstration), the work that lawyers do with computers doesn’t require desktop processing power.

Here are some data (from Gartner, as reported in a 2012 USA Today article) about desktop PC shipments compared to mobile PC shipments:

gartnerdatachart

It looks like people have preferred mobile PCs to desktop PCs since 2007. I doubt this trend has changed since 2012. Mobile PCs just make the most sense for most people most of the time: they give you the tools you need to do your work whether you’re in your office, someone else’s office, offsite, on a plane, and so on. Why are 60% of law firms buying desktop PCs year after year?

The Baffling

“Soft Costs”

The surveys report law firms’ total technology expenditures as a percent of revenue (1%–4% is typical), but this amount excludes IT staffing and training. Why not include these items? The 2013 survey characterizes IT staffing and training as “soft costs,” but money spent on soft costs is still money, and it’s not as if these costs are set in stone. IBM’s recent experience with deploying Mac computers (as reported by CIO.com) makes for an interesting counterpoint:

IBM is already benefiting from the change of heart and organizational process, according to [Fletcher Previn, vice president of workplace-as-a-service at IBM]. The team of 24 IT staffers and specialists who support Macs at IBM is much smaller than what was required for PC support, and it spends less time fixing technical problems, Previn says. “You just have fewer problems coming in.”

While 40 percent of IBM’s PC users call the helpdesk for troubleshooting, on average only 5 percent of the company’s Mac user [sic] do the same, according to Previn. “The longer this program runs, the more compelling the business case becomes,” he says. “I can confidently say that every Mac that we buy is making and saving IBM money.”

Just how much money? “IBM tells us that each Mac is saving $270 compared to a traditional PC, thanks to much reduced support cost and better residual value,” said Luca Maestri, Apple CFO and senior vice president, during the company’s most recent earnings call.

No Crystal Ball

The surveys offer data on what law firms purchased in the last 12 months and what they plan to purchase in the next 12 months, broken down by a number of categories (for example, according to the 2016 survey, 61% of law firms purchased desktop hardware in the last 12 months, and 55% of law firms plan to purchase desktop hardware in the next 12 months). However, what law firms plan to purchase and what they actually purchase are often very different, and actual, historical purchases are a much better predictor of future law firm purchases than planned purchases.

For example: by category, 2016 purchases differed from 2015 purchases by 1.5% on average, with a standard deviation of 4.2% – in other words, 2016 purchases weren’t all that different from 2015 purchases. In contrast, 2016 purchases differed from 2015 planned purchases by 6.7% on average, with a standard deviation of 6.5% – a bigger difference.

This is similar to recent years:

  • 2015 purchases differed from 2014 purchases by −0.8% on average, with a standard deviation of 3.9%; 2015 purchases differed from 2014 planned purchases by 4.0% on average, with a standard deviation of 7.4%.
  • 2014 purchases differed from 2013 purchases by 2.1% on average, with a standard deviation of 5.1%; 2014 purchases differed from 2013 planned purchases by 8.3% on average, with a standard deviation of 8.5%.

It would be interesting to know what’s driving this: what makes technology purchases by category so difficult to predict, even when actual purchases by category don’t seem to change much from year to year?