The Death of Best of Breed Systems?
For years large law firms have operated on best of breed systems whether they be PMS, DMS or CRM. By contrast, smaller firms tend to operate on all-in-one systems. Gradually we have seen all of these systems move to a hosted model before transitioning to become proper cloud-based systems.
On paper this sounds good, but it has brought with it a number of problems. We are seeing an increasing number of clients begin to question the best of breed model and ask what the future looks like. A few of the challenges are set out below:
1. Client Experience
For many large law firms operating best of breed systems, the client experience pretty much looks like the use of some third-party onboarding software, running the work via email and potentially using some document sharing technology. This model has not changed a lot in the last 30 years and does not really lend itself to the best client experience. Many are thinking it needs to improve.
2. Cost
Running multiple best of breed systems brings with it a cost. Not only are you dealing with multiple suppliers and their relevant price increases but in addition there is an integration and management cost. All of this is compounded by the annual increases we are seeing from SaaS based vendors who are often backed by private equity. Many are finding this is not sustainable and the more systems they have the harder this becomes.
3. Efficiency
I remember Karl Chapman of Kim Technologies at Legal Geek saying a few years back how many large law firms had no data. What he meant by this was your typical large law best of breed model does not allow you to understand the granularity of transactions bar what you have in unstructured email and time recording codes. This operating model does not give you the information you need to improve but in addition the model often delivers very few tools for any fee earner or practice area to improve efficiency. Yes, there are increasingly add ons but that again compounds the problem.
4. Basics
Despite many of these systems having huge amounts of meta data, often they operate in an insular fashion. Many users of combined systems have access to much more detailed dashboards and reports, but these are frequently not available from best of breed systems or if they are available require further integration work or costs.
5. Microsoft
Increasingly people are structuring their technologies around Microsoft given its increasing dominance and capability. How does this dovetail with an increasing number of SaaS systems where you part with your data? Yes, you have APIs and MCP, but this structure is suboptimal compared with having all your data in a single database or even Fabric.
6. Morphing of Products
It is getting a lot harder to categorise products into neat groupings. Increasingly products are expanding out into other areas and for the first time it is potentially foreseeable that we will have platforms for legal. Increasingly IT directors are talking to me about other products that will be replaced (i.e., by buying a particular product so they can part with three others). Whatever happens we are going to start to see some rationalisation within the market. Any product that does a single task will need to be exceptional or deliver huge amounts of value to fee earners to be retained.
7. AI and Data Strategy
We have talked about this before but ironically those operating best of breed systems are increasingly losing control over their data. Many of these systems want you to use their AI whereas your strategy might be focused around Microsoft or another leading system. Yes, some of these systems can work together and have some have alliances but again, is this the best possible model for your business? It may be but the fact remains that those who are focusing perhaps more on a combined system or Microsoft may have an easier journey.
8. Cyber
It is increasingly becoming apparent that the more external systems you operate the more targets there are and more potential vulnerabilities. What many seem to be thinking would be better is a less is more strategy with deeper, stronger relationships with individual SaaS providers but with greater degrees of partnership, understanding, governance and infosec. Many are struggling covering cyber as they should because of the multiplicity of vendors serving their businesses.
9. The rise of TradTech
I am not going to repeat what has been said in a previous article The Era of TradTech — Hyperscale Group Limited, but all of those points also apply here, and perhaps lend themselves more to having less systems with broader functionality.
The Way Forward?
So, what is the way forward? I fully accept, things may not change but we are seeing an increasing number of firms beginning to question whether a best of breed model is right for them going forward? Do they need more from a smaller number of providers? What should their operating platform look like in the future to drive client experience and efficiency? In an environment of rising costs, where will they get their best value from their technology spend?
For our part what is obvious to me is we are currently seeing more change in the last three to five years than we have done in the twenty-five before. One has to question if the operating models that we have relied on in the past are the right ones to move forward with. As a minimum they need to evolve, albeit some are perhaps thinking more radically. It will be interesting to see what the future brings but with increasing M&A Hyperscale Trackers — Hyperscale Group Limited, perhaps a platform for legal is much more foreseeable than perhaps it was in the past.
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