The fiscal year for law firms is ending on a high note—with more to come. Thomson Reuters’ most recent data shows that a solid majority of firms (70%) predict that the moderate to high growth in demand experienced in 2021 will continue well into 2022. Regarding operational planning for 2022, the top 5 tactics law firms will take are:
- More efficient real estate/rethinking space;
- New practice tools to drive efficiencies;
- Rationalizing secretarial support;
- Improving billing and collections; and
- More technology.
Clearly, many if not most firms are abuzz with talk regarding a more efficient or reconfigured use of their current real estate footprint—but what does it take to achieve this vision of the future? One thing that can hold a law firm back from the new-“visioning” taking place is paper—and the shocking amount of real estate most firms currently dedicate to housing an onsite records room.
As a part of firms’ strategic thinking for 2022, firms need a strategy for onsite paper, i.e. their onsite records rooms. This is a digital records room, and it’s way past due. A digital records room is a firm-wide system of software, workflow and services, to digitize paper records to the DMS, replacing paper file rooms with a new digital operation.
A digital records room supports the firm’s strategic plan to reduce and rethink real estate by eliminating the paper footprint of records rooms and scattered file storage. It is also used to service attorneys working from home more efficiently—and does so more securely and in line with the firm’s information governance policy. Let’s dig in to these 3 reasons to build a digital records room.
1. Efficiency and Productivity of Attorneys
When records are digitized, records retrieval is transformed and dramatically improved for the end users—the attorneys. Records managers no longer must rifle through shelves to locate boxes, and then sort through to find the right manila folder to locate the actual document, taking valuable time away from the attorneys’ review.
The records are digitized typically through a scanning and cataloging process that associates keywords or matter numbers or other valuable data within a document enabling users to search on what they know to produce a list of possible matches. Results are produced in seconds or minutes versus hours, or even days.
In a hybrid operation which most firms are planning on, this process becomes even more simplified as records retrieved would need to be shipped offsite to individual attorneys’ home offices, a logistical and security nightmare.
A tertiary benefit is quickly realized through this process of digitizing records, which is that the record can be queried using a full-text searching tool. A full-text search tool can usually be combined with another search tool letting users add criteria like matter number or keyword to zero-in on the exact document needed. Not only this, but digitization helps firms unlock the the information in their matters so they become searchable. Firms are in an improved position for their knowledge management processes, and attorneys are able to search and find prior work product more quickly. This is simply not possible unless your records are digitized.
Another significant benefit of a digitized records room that directly benefits attorney’s efficiency and productivity is the ability to back up and make copies of the files. Duplicating an entire physical records room is simply not feasible. Once documents are digitized, however, they are easily copied and thus protected against accidental destruction from flood, fire, or even accidental discard.
2. Security and Information Governance
With a physical records room, the effort to share useful documents securely and within the firm’s IG policy is significant. With a physical records room, firms must apply physical security to restrict access. This means locking file cabinets, keycard systems, and other similar measures, which require time and attention. And with a physical records room, it is daunting to locate the proper files for destruction.
In a hybrid operation, the security of physical records put the firm at an even greater risk—greater risk of lost or compromised files in transit; greater risk of logistical errors, greater risk of exposure as files move through various domains not directly monitored by the firm.
With a digitized records room, a firm’s documents are cataloged using a retention schedule, and destruction of the appropriate files is simply reporting, approving and then automatically deleting files.
Once digitized, firms can apply common computer security measures to control who sees what documents. This sort of security can be organized globally, by type of document, by case, author or any other criteria as needed by the firm’s policies.
3. Real Estate Reduction
Finally, an obvious benefit of digitization is the elimination of real estate dedicated to the storing of onsite records. Law firms routinely recover hundreds or even thousands of square feet of valuable floor space when they digitize their records.
Real estate is the second biggest expense for a law firm. As firms aggressively roll out their real estate compression plans, they must eliminate the floor space required for records rooms and ad hoc paper file storage.
The majority of firms spend approximately 6-8% of gross revenue on real estate costs in major metropolitan areas. Cushman & Wakefield projects that firms will be able to save as much as 3.5% of revenue by renegotiating their leases.
Firms can run projects to digitize the existing records rooms in each city office, then apply the same solution to maintaining ongoing digitization of new paper records as they are received and used.
The concept of a digital records room has appealed to firm leadership and IG professionals for some time. Everyone understands how paper records make firms less agile. The substantial costs, risks and inefficiencies of paper records just keep accumulating. This impedes profitability and growth on many fronts. For firms that have been waiting for a business case to win the project with their executive committees, now’s the time.